Mega Backdoor Roth
A strategy using after-tax 401(k) contributions to move large sums into Roth accounts, far beyond normal limits.
The mega backdoor Roth lets people with the right kind of 401(k) plan contribute far more to Roth accounts than the standard limits allow. It works by making after-tax (not Roth, not pre-tax) contributions to the 401(k), then converting those to Roth — either inside the plan or by rolling to a Roth IRA.
It only works if your employer's plan permits both after-tax contributions and in-plan conversions or in-service withdrawals. When available, it can move a large additional sum into tax-free territory each year, which is why high earners with the right plan prize it. Not all plans support it, so the first step is always checking your plan's rules.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.