Mega backdoor Roth calculator

How the mega backdoor Roth works

There are two separate 401(k) limits each year, and the gap between them is the opportunity. The first is the employee deferral limit - the most you can put in from your paycheck as traditional or Roth contributions ($24,500 for 2026). The second, much larger limit is the total additions limit under Internal Revenue Code section 415(c) - $72,000 for 2026 - which counts everything that goes into the account: your deferral, your employer’s match, and any after-tax contributions.

If your plan allows it, you can fill the space between those two limits with after-tax dollars and then convert them to Roth - a mega backdoor Roth - moving far more than the normal limit into an account that grows and is withdrawn completely tax-free.

Worked example

Suppose you max your own deferral at $24,500 and your employer contributes $12,000:

• Total 2026 limit (415c): $72,000
• Used so far (you + employer): $24,500 + $12,000 = $36,500
• After-tax room for a mega backdoor Roth: $72,000 − $36,500 = $35,500

That is $35,500 of additional money you could route into Roth this year, on top of your normal deferral - which is why high earners chasing financial independence prize the strategy so highly.

The two features your plan must have

The room only matters if your 401(k) supports both:

1. After-tax contributions (a distinct bucket from traditional and Roth), and
2. In-plan Roth conversions or in-service withdrawals to move those after-tax dollars into Roth before they generate much taxable earnings.

Many employer plans support neither, in which case the strategy is simply not available regardless of the room. Call your plan administrator and ask about both by name before you change your contribution elections.

Why convert quickly

After-tax contributions grow tax-deferred, but their earnings are taxable when converted. The sooner you convert each after-tax contribution to Roth, the less earnings accumulate and the smaller the taxable portion. Plans that offer automatic in-plan conversion make this effortless; otherwise convert manually as often as the plan allows.

Mega backdoor vs regular backdoor Roth

These are different tools that stack:

• The backdoor Roth moves up to the IRA limit ($7,500 in 2026) into a Roth IRA for high earners who exceed the income limit - see the backdoor Roth calculator.
• The mega backdoor Roth moves up to tens of thousands through your 401(k).

Done together, a high earner can put well over $40,000 of extra money into Roth in a single year.

If your plan has no after-tax bucket

If your 401(k) does not offer after-tax contributions, the mega backdoor is off the table - but you still have tax-advantaged room to fill, in this order:

1. Max your regular deferral ($24,500 in 2026) and capture the full employer match first.
2. Backdoor Roth IRA ($7,500) if you are over the Roth income limit.
3. HSA, if you have a high-deductible health plan - it is triple tax-advantaged.
4. Taxable brokerage for anything beyond that, using tax-efficient index funds.

In-plan conversion vs in-service rollover

There are two ways to move after-tax money to Roth, and which your plan offers changes how often you should act:

• In-plan Roth conversion keeps the money inside the 401(k); some plans automate it on every paycheck, which is ideal.
• In-service withdrawal rolls the after-tax dollars out to a Roth IRA while you are still employed - more investment choice, but more paperwork.

Either way, convert frequently so taxable earnings stay near zero.

Common mistakes

• Assuming every 401(k) allows it - most do not.
• Letting after-tax contributions sit and accrue taxable earnings before converting.
• Confusing the after-tax bucket with Roth deferrals - they are separate.

If you have maxed your deferral and still save aggressively, the mega backdoor Roth is usually the single largest remaining tax-advantaged bucket available.