The Mega Backdoor Roth is a way to move far more money into Roth than the ordinary contribution limits allow — sometimes tens of thousands of dollars a year on top of your normal 401(k) deferral. It works only in plans built to support it, which is exactly what this site helps you check.
The two buckets in a 401(k)
Most people think of a 401(k) as having two buckets: pre-tax (traditional) and Roth. Your own contributions to those buckets are elective deferrals, capped together at the IRC §402(g) limit — $24,500 for 2026 (plus catch-up if you are 50 or older).
Some plans have a third bucket: after-tax (non-Roth) contributions. This is the key to the whole strategy. After-tax contributions are not capped by §402(g). They are capped only by the much larger §415(c) overall annual-additions limit — $72,000 for 2026 — which counts everything credited to your account: elective deferral, employer match and non-elective contributions, and after-tax.
Why “mega”
The gap between those two limits is the opportunity. If you max your $24,500 deferral and your employer adds, say, $20,000 in match, you have used $44,500 of the $72,000 ceiling. That leaves $27,500of room you can fill with after-tax contributions — far more than the standard Backdoor Roth IRA's $7,000. That is the “mega” part.
After-tax is not Roth — yet
After-tax dollars are not automatically Roth. Left alone, the contributions are tax-free on the way out (you already paid tax on them) but their earnings grow tax-deferred and are taxable when distributed. To make the whole thing tax-free, you convert the after-tax money to Roth. There are two paths:
- In-plan Roth conversion — the after-tax balance is converted to a Roth account inside the 401(k). Best when it happens automatically each pay period, because there is little time for taxable earnings to accrue before conversion.
- In-service distribution to a Roth IRA — you withdraw the after-tax contributions while still employed and roll them to a Roth IRA. A valid substitute when there is no in-plan conversion, but the tax forms differ.
A plan must offer the after-tax bucket and at least one of these conversion paths. The SPD decoder checks both in three questions.
The IRS limits
Every figure below is transcribed from the official IRS COLA notice for the year, with a primary-source link. These change annually, so always confirm the current year.
| Limit | 2026 | 2025 | Statute |
|---|---|---|---|
| §415(c) overall annual-additions limit | $72,000 | $70,000 | IRC §415(c)(1)(A) |
| §402(g) elective-deferral limit (Roth + pre-tax) | $24,500 | $23,500 | IRC §402(g)(1) |
| Age-50+ catch-up | $8,000 | $7,500 | IRC §414(v) |
| Age 60–63 higher catch-up | $11,250 | $11,250 | IRC §414(v)(2)(E)(ii) |
| Annual compensation limit | $360,000 | $350,000 | IRC §401(a)(17) |
One subtlety worth knowing: the age-50+ catch-up (§414(v)) sits on top of the §415(c) limit, so it does not reduce your after-tax room. The capacity calculator handles this correctly.
Who it is for
The Mega Backdoor Roth makes sense when you are already maxing your regular deferral, have cash flow to spare, and your plan supports it. It is most common at large tech employers whose plans include the after-tax bucket and automatic in-plan conversion. If your plan does not offer the bucket, the strategy simply is not available — and a standard 401(k) plus a Backdoor Roth IRA remain solid pathways.