Mega Backdoor Roth
Calculator 2026

A strategy that uses your employer 401(k) plan to put up to ~$47,000 (in 2026) of after-tax contributions into the plan beyond the normal $23,500 elective deferral limit, then immediately convert that after-tax money to a Roth IRA (or Roth 401(k)) — turning what would have been a low-growth taxable bucket into tax-free Roth growth. Mechanic: §402(g) elective deferral cap is $23,500, but the §415(c) total annual additions cap is $70,500 (2026, under 50). The space between (after subtracting employer match) is available for after-tax contributions. Then either an in-plan Roth conversion or in-service distribution to a Roth IRA moves that after-tax money into Roth wrapper. The 'mega' prefix distinguishes from the regular Backdoor Roth IRA ($7,000 IRA cap), which is much smaller.

Two requirements: (1) The plan document must explicitly permit AFTER-TAX (non-Roth) employee contributions beyond the $23,500 elective deferral cap. Only ~40-50% of plans offer this — large tech and finance employers (Google, Meta, Microsoft, JPMC) typically do; small employer plans usually don't. (2) The plan must permit EITHER (a) in-plan Roth conversion of after-tax contributions, OR (b) in-service distribution / withdrawal of after-tax contributions while employed (so you can roll them to a Roth IRA). Without one of these, after-tax contributions sit in a taxable bucket inside the 401(k) and the strategy fails. Read your Summary Plan Description (SPD) or ask HR. The terms 'in-plan Roth rollover,' 'after-tax contributions,' and 'in-service distribution' should appear.

2026 IRS Rev. Proc. inflation adjustments — §415(c) total annual additions cap: $70,500 (under 50), $78,000 (age 50-59 with $7,500 catch-up), $82,500 (age 60-63 with SECURE Act 2.0 super catch-up of $11,250). §402(g) elective deferral limit: $23,500 (under 50), $31,000 (50+). After-tax bucket available = total cap − elective deferral − employer match − any other §415(c) additions. Example: $200k salary, max elective deferral $23,500, 6% employer match = $12,000. After-tax bucket available = $70,500 − $23,500 − $12,000 = $35,000 (under 50). This $35,000 is the Mega Backdoor capacity for that year.

Depends on what your plan allows and your preference. (a) In-plan Roth conversion: convert the after-tax 401(k) money to a Roth 401(k) sub-account within the same plan. Pros: simple, automatic via plan administrator. Cons: subject to plan rules (e.g., investment options, fees), money stays in 401(k) until separation/distribution. (b) In-service rollover to Roth IRA: distribute the after-tax money and roll to an external Roth IRA. Pros: full investment freedom (any IRA-eligible holdings), avoids future 401(k)→IRA rollover at separation, withdrawal flexibility. Cons: requires more steps each year. Either way the conversion is generally tax-free IF you act quickly — any earnings on the after-tax contributions between deposit and conversion ARE taxable. Many practitioners convert immediately (same payroll cycle or weekly) to minimize taxable earnings.

Different vehicles, very different scale. REGULAR Backdoor Roth: uses Traditional IRA. Annual cap $7,000 ($8,000 if 50+). Pro-rata rule under §408(d)(2) makes it complicated if you have pre-tax IRA balances. Conversion is generally tax-free if no pre-tax IRA. MEGA Backdoor Roth: uses employer 401(k). Annual capacity up to ~$47,000+ depending on salary and employer match. No pro-rata complication (401(k)/IRA aggregation rules differ). Requires employer plan support. Many high earners do BOTH each year — $7,000 regular Backdoor + ~$35-47,000 Mega = $42-54,000 into Roth annually. Combined with regular Roth 401(k) ($23,500 elective deferral) total Roth-bucket dollars per year can exceed $70,000.

Different from the IRA pro-rata rule. For 401(k) after-tax conversions, the IRS does a separate pro-rata calculation between (a) the after-tax CONTRIBUTIONS (your basis — should be tax-free on conversion), and (b) the EARNINGS on those after-tax contributions while sitting in the 401(k) (taxable on conversion). If you convert weekly/same-pay-cycle, earnings are near-zero so the conversion is nearly tax-free. If you wait years to convert, accumulated earnings on the after-tax bucket become a large taxable amount. The §72(d) ordering rule may allow some carving — your specific plan administrator handles this on Form 1099-R issuance.

Yes — directly. Employer contributions (match + any non-elective contributions) count toward the §415(c) $70,500 total annual additions cap. Example: $200k salary, you max elective deferral at $23,500, employer puts in 6% = $12,000 match, your after-tax capacity is $70,500 − $23,500 − $12,000 = $35,000. If your employer profit-shares an additional $10,000, that further reduces capacity to $25,000. SECURE Act 2.0 allows employees to elect Roth-treatment for employer matches (Roth match), but this doesn't change the §415(c) cap — it just changes the tax characterization. Always factor in expected total employer contributions when planning your after-tax election.

It was proposed for elimination in the Build Back Better Act (2021) Section 138302 — which would have prohibited after-tax 401(k) contributions and conversions starting January 1, 2022 for everyone, and applied retroactively to high earners ($400k+ single / $450k MFJ) by 2031. The bill failed to pass the Senate. As of 2026, no successor legislation has been enacted. The strategy remains legal under current Treasury regulations and the §415(c) framework. However, future tax legislation could close the loophole — many practitioners view the strategy as moderately politically vulnerable but currently sound.

Yes, IF your Solo 401(k) provider permits after-tax contributions AND in-plan Roth conversions or in-service distributions. Most major brokerage Solo 401(k) plans (Fidelity, Schwab, Vanguard) historically did NOT support after-tax contributions — they only allowed pre-tax + Roth elective deferrals. As of 2026, Charles Schwab, E*TRADE, and a few third-party custom Solo 401(k) providers (My Solo 401k Financial, Sense Financial, others) explicitly support the Mega Backdoor structure. Self-employed individuals with substantial business income can potentially contribute up to the full $70,500 §415(c) cap themselves (as both employee and employer of their own LLC/S-corp), making the Mega Backdoor especially powerful for high-income solopreneurs.

As fast as possible to minimize taxable earnings. Best practice: same payroll cycle conversion. Many plans (Google, Meta, Microsoft 401(k)) offer 'automatic in-plan conversion' that converts each after-tax contribution to Roth on the same day it's deposited — zero taxable earnings, fully tax-free conversion. If your plan requires manual conversion, do it weekly or monthly at minimum. Quarterly or annual conversion lets earnings accumulate, increasing the taxable portion. Example: $35,000 after-tax contributions left in a 401(k) at 10% return for a year creates $3,500 of taxable earnings on conversion at your marginal bracket — at 32% bracket = $1,120 in tax that could have been zero with daily conversion.