The Mega Backdoor Roth is a powerful strategy that allows high earners to contribute up to tens of thousands of dollars more into a Roth account annually. Use this calculator to determine your maximum after-tax contribution limit for the current tax year.
Mega Backdoor Roth Calculator
Mega Backdoor Roth Calculator Formula
Max After-Tax = Total 415(c) Limit – (Employee Deferral + Employer Contributions)
*Catch-up contributions are added to the total limit if applicable.
Formula Sources: IRS.gov, NerdWallet
Variables Explained
- Total 415(c) Limit: The IRS annual limit for all contributions to a defined contribution plan.
- Employee Deferral: Your standard elective salary deferrals (Pre-tax or Roth).
- Employer Contributions: Money your employer puts in, such as a match or profit-sharing.
- Catch-up: An additional amount allowed for participants aged 50 or older.
What is a Mega Backdoor Roth?
A Mega Backdoor Roth is a tax-planning strategy available to employees whose 401(k) plans allow for “after-tax contributions” and “in-plan conversions” or “out-of-plan distributions.”
Unlike the standard Backdoor Roth IRA (which is limited by the $7,000 IRA cap), the Mega Backdoor strategy leverages the much higher 415(c) limit, potentially allowing up to $46,000+ of additional Roth savings per year.
How to Calculate (Example)
- Identify the IRS total limit for the year (e.g., $69,000).
- Subtract your employee contribution (e.g., $23,000).
- Subtract your company’s matching contribution (e.g., $7,000).
- The remaining balance ($39,000) is your maximum after-tax contribution room.
Frequently Asked Questions (FAQ)
Does every 401(k) allow this?
No. Your plan must specifically allow “after-tax” (not just Roth) contributions and “in-service distributions” or “in-plan conversions.”
Are after-tax contributions tax-deductible?
No, they are made with post-tax dollars. However, once converted to Roth, the growth becomes tax-free.
When should I convert the after-tax money?
Ideally, immediately. This minimizes the amount of taxable earnings that accumulate before the conversion to Roth.
Is there an income limit for this strategy?
No, unlike direct Roth IRA contributions, the Mega Backdoor Roth does not have income eligibility limits.