Mega Backdoor Roth
Most high earners max their $23,500 elective deferral and stop. §415(c) allows total contributions of $70,000 a year — the gap is the mega backdoor. Here's the calculator, the rules, and the checklist for whether your plan supports it.
Free, no signup, runs in your browser · IRS §402(g), §415(c), §414(v) constants shown inline
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Type your salary and 401(k) numbers. The calculator returns the after-tax contribution room your plan permits under §415(c), and projects the balance if that room fills up every year until retirement.
After-tax room this year
$31,500
Contribute this much as after-tax, then convert to Roth in-plan or roll to a Roth IRA. Full §415(c) additions cap for the year would be $70,000.
Projected Roth balance in 20 years
$1,291,358
Tax-free growth
$661,358
Tax avoided vs taxable
$165,340
Assumes contributions continue at today's level and grow at 7% a year. Tax comparison uses a 25% blended rate on long-term gains and qualified dividends. Rough figure — for planning, not for filing.
The elective 401(k) deferral tops out at $23,500 in 2025, but §415(c) lets total additions — employee elective, employer match, and after-tax employee — reach $70,000. That gap is what the mega backdoor Roth fills. For a mid-career employee whose employer puts in $15,000, that's another $31,500 landing in Roth every year on top of the regular deferral.
Once the after-tax dollars are in the 401(k), you convert them to Roth. Most plans support one of two mechanics — an in-plan Roth conversion (Fidelity, Empower, most of Vanguard) or an in-service withdrawal that rolls to an outside Roth IRA. Both end up in the same tax posture; the choice usually comes down to investment menu and paperwork friction.
The maneuver only works if the summary plan description explicitly permits (1) after-tax contributions above the $23,500 line and (2) in-service conversions or withdrawals of after-tax money. Roughly 60% of Fortune 500 plans allow both. The calculator below assumes yours does — the checklist further down helps you confirm before contributing a dollar.
The name is a joke. There's nothing back-door about it — the IRS knows exactly what the mechanic is, published guidance on it in Notice 2014-54, and hasn't moved to shut it down since. What makes it a "mega" anything is the sheer contribution room compared with the regular backdoor Roth IRA, which tops out at $7,000 a year.
Here's the mechanic in five lines:
Not every plan does. This is the part where the mega backdoor becomes a lottery ticket: at some employers you can move an extra $30k a year into Roth, and at the shop across the street, the plan document flatly forbids after-tax contributions and you're stuck at $23,500.
Two questions decide it:
If both answers land at "yes," you're good. If either is a no, you can still lobby your benefits team. Roughly one in four plans that added the feature in the last five years did so after a Slack thread of senior engineers pinged HR at once.
Everyone messes at least one of these up on their first attempt. Better to see them now.
After-tax contributions sit in a sub-account. Anything the sub-account earns between the moment you contribute and the moment you convert is pre-tax — so when you convert, that earnings slice is ordinary income for the year. The fix is automatic in-plan conversion each pay period so the money doesn't have time to grow before it moves to Roth. If your plan supports it, enable it. If you have to convert manually, do it monthly rather than annually.
SECURE 2.0 opened the door for employers to make matches in Roth. Most haven't. If your match is pre-tax and you're calculating your after-tax room based on the assumption that all your elective is Roth, you'll under-fill the mega backdoor. The calculator above uses the elective plus employer total, so it's already accurate — but double-check the plan portal before you set the payroll deferral percentage.
After-tax contributions are almost always taken as a percentage of pay per period, not a fixed dollar amount. If you get a mid-year raise or a bonus lands late in the year, it's easy to over- or under-contribute. Some plans reset contributions to zero once you hit the elective deferral cap, which will stop after-tax contributions too until you re-elect. Recalibrate every October.
Not everyone. If you're not already maxing the elective deferral, do that first. If you don't have cash flow to fund the after-tax bucket without touching an emergency fund, do that too. The mega backdoor is a lever for people whose after-tax savings would otherwise land in a taxable brokerage. It moves those dollars into a Roth wrapper — same investment, different tax posture.
A rough rule of thumb: assume the Roth wrapper is worth about 25 basis points a year in avoided drag, plus a tax-free withdrawal in retirement instead of long-term-capital-gain rates on unrealized appreciation. Over 30 years that's meaningful money, especially if the alternative was a taxable account that would have generated dividends taxed annually.
One case where it doesn't pencil: if you expect your marginal rate in retirement to be materially lower than today, and you're already at pre-tax capacity, the pre-tax bucket may still win at the margin. The math for most high earners still favors Roth because the wrapper compounds tax-free indefinitely — but the pre-tax-versus-Roth debate deserves a spreadsheet rather than a rule of thumb.
The mega backdoor is one of maybe eight tax-advantaged levers available to a high-earning household. HSA, DAF, 529, municipal bonds, direct indexing, deferred comp, backdoor IRA, mega backdoor. Order matters less than most people think — filling any of them is better than filling none. But the mega backdoor tends to sit near the top of the pecking order because the annual room is large and the wrapper is Roth, which is the most valuable of the tax wrappers on a time-adjusted basis.
The reason a consolidated net-worth view helps here isn't the contribution decision — you can do that with a spreadsheet. It's the tracking. Once the mega backdoor is on autopilot, you have money moving between an after-tax sub-account, a Roth sub-account, and possibly an external Roth IRA every pay period. Without a single view, it's easy to lose sight of how much has actually landed in Roth versus how much is still stranded as after-tax basis. wlthy reads the account balances and gives you the Roth line as a single number, updated in real time.
Sources referenced
IRC §402(g), §415(c), §414(v); IRS Notice 2014-54; IRS Notice 2024-80 (2025 dollar limits); Rev. Proc. 2022-38; SECURE 2.0 Act §109 (super catch-up), §603 (Roth catch-up). Educational only — consult a tax adviser for filing decisions.
The stereotype fits: $200K+ base, RSUs on top, employer at a Fortune 500 with a Fidelity or Empower plan that lets you push after-tax through payroll. If you're already maxing pre-tax and still have cash flow left over, this is often the highest-return tax move you have available before touching a taxable brokerage.
If your comp stack is heavy on RSUs vesting or a founder's salary drawn from a portfolio company, the mega backdoor pairs well with the wider equity picture. Section 83(b) elections, deferred comp, and mega backdoor Roth contributions all interact — the point is to route dollars into the right tax wrapper before the year closes.
The Roth account isn't just a retirement bucket; conversions have a five-year clock, which means today's mega backdoor contribution starts building tax-free withdrawal room for a FIRE bridge in the early 2030s. If you plan to leave paid work in your 40s or 50s, filling the after-tax bucket now is a lever nobody talks about.
The regular backdoor Roth moves a small amount — this year, up to $7,000 — from a non-deductible traditional IRA into a Roth IRA. The mega version runs through your employer's 401(k) and can move roughly $30,000 to $46,500 a year, depending on how much your employer already contributes. Both end in a Roth; the mega version is an order of magnitude bigger.
Two questions to ask HR or your plan portal. First: does the plan allow after-tax employee contributions above the standard $23,500 elective deferral? Second: does it allow in-service distributions or in-plan Roth conversions of that after-tax money? If both answers are yes, you're in business. If either is no, the mega backdoor isn't available — the after-tax money will sit and generate taxable growth until you eventually convert it at separation.
The pro-rata rule at the IRA level (which bites the regular backdoor Roth if you have any pre-tax IRA balances) doesn't affect the mega backdoor because the mechanic runs entirely inside the 401(k). Convert the after-tax within the plan and the pre-tax IRA balances on the outside are irrelevant. If you roll to an external Roth IRA instead, only the earnings portion of the after-tax is taxable — see §402A(d)(4)(B) and Notice 2014-54.
Anything the after-tax money earns before conversion is pre-tax. When you convert or roll, the earnings are taxable that year at ordinary rates. The workaround: convert immediately after contributing, before meaningful earnings accrue. If your plan supports automatic in-plan Roth conversion of after-tax contributions each pay period, turn that on. If it's a manual quarterly conversion, you'll owe a bit of ordinary-income tax on the earnings.
As of 2026 it's still open. Build Back Better in 2021 proposed shutting it down, but the provision never became law. The current administration hasn't reintroduced the change. Congress could still close it in a future reconciliation package, which is why practitioners tend to fill the after-tax bucket while it's available rather than assume it'll be there in five years.
No. §415(c) is about contributions to a defined contribution plan — RSU vestings are ordinary compensation but don't route through the 401(k). Bonuses and RSU income can, however, boost your ability to fund the after-tax bucket if you have payroll deferrals set as a percentage.
For an in-plan Roth conversion of after-tax, expect a 1099-R showing the gross distribution in Box 1, the taxable amount (usually just the earnings) in Box 2a, and Code G in Box 7. For an in-service withdrawal split-rolled to a Roth IRA and traditional IRA under Notice 2014-54, you'll usually see two 1099-Rs. CPAs charge extra for this every March — flag it early.
wlthy aggregates the 401(k), Roth IRA, taxable brokerage, and every other account into one net-worth view. The mega backdoor conversion moves money across account boundaries; without a consolidated view you can't easily see whether your after-tax contributions are actually landing in Roth or still sitting as after-tax basis. The Roth balance line in your dashboard becomes the answer.
The mega backdoor moves money across three account boundaries. wlthy adds up the 401(k), the Roth IRA, and every taxable account so you can see the Roth line grow without exporting a single spreadsheet.
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