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The Mega Backdoor Roth

Some 401(k) plans let you put in far more than the regular contribution limit, as after-tax money, and then move it to Roth. That is the mega backdoor Roth: a way to add tens of thousands of dollars a year to accounts that grow tax-free, for savers whose plan allows it.

It needs two features many plans don't offer, and it only pays if you already fill the usual accounts. If yours does, it is one of the largest tax-free savings opportunities there is.

Three kinds of money in one 401(k)

A 401(k) can hold three kinds of contribution, each with its own rule.

Your regular contributions, pre-tax or Roth, up to $24,500 in 2026. This is the limit most people mean by “the 401(k) limit”.
Your employer's match or profit sharing.
Your after-tax contributions: money from pay you have already been taxed on, which is not Roth. Put in and left alone, its growth is taxed as income when you take it out.

All three together may not pass $72,000 in 2026, or your pay if that is less. Catch-up contributions from 50 sit on top of it. Most people never come close, because they stop at the regular limit. The gap between what they put in and the overall limit is the room the mega backdoor uses, and moving those after-tax dollars to Roth is what makes their growth tax-free.

How much room you have

The after-tax room is whatever the 2026 limit leaves once your own contributions and your employer's are counted. Set your pay and what your employer puts in, as a share of pay, for a saver under 50 who contributes the full regular amount.

Explore: your after-tax room

Pay$150K/yr

Employer contribution, share of pay5%

Limit on everything going in	$72,000
Less your regular contributions	-$24,500
Less your employer's	-$7,500
After-tax room	$40,000

What your plan has to allow

After-tax contributions. Many plans offer only pre-tax and Roth. Your plan's summary plan description says whether after-tax is allowed and how much.
A way to move it to Roth. Either an in-plan Roth conversion, or a withdrawal while you still work there that you roll to a Roth IRA. Under IRS Notice 2014-54 the after-tax dollars can go to a Roth IRA and their earnings to a traditional IRA in the same rollover.
Converting soon. The after-tax dollars convert without tax, but any growth before the move is taxed as income when it is converted. Plans that convert automatically each paycheck keep that close to nothing.
Passing the plan's fairness test. After-tax and matching contributions are tested so that highly paid employees don't save far more than everyone else. A plan that fails can refund part of the highly paid employees' after-tax money, so the room you can actually use may be lower than the explorer shows.

Where it fits

The mega backdoor is for money you would otherwise invest in a taxable brokerage account. Most savers fill other accounts first: enough regular 401(k) contributions to collect any employer match, an HSA if you have one, the rest of the regular 401(k) limit, and an IRA. After that, for money you won't need before retirement, after-tax 401(k) dollars moved to Roth beat a taxable account, because their growth is not taxed again.

How your plan handles it

On the Assets & debts page, a 401(k) has an After-tax (mega backdoor) amount beside its regular contribution. The plan gives it no tax deduction and adds it to your Roth money, as if your 401(k) moves it to Roth the same year, which is the usual setup. Gains between going in and being moved would be taxable in real life, and the plan leaves them out: close to nothing when your 401(k) converts each paycheck, more when it converts once a year.

The Savings page checks each person's regular contributions, after-tax dollars and employer match together against the same limit as the explorer above, and flags the total when it goes over.