Mega backdoor Roth through a 401(k)
Explore with diligence: legitimate, needs careful checks.
Some 401(k) plans let you put in after-tax money beyond your regular contribution, up to the plan's much higher overall limit, and convert it to Roth right away. Once it's Roth, it grows and comes out tax-free.
For high earners who already max out their regular 401(k) and backdoor Roth IRA, it's the largest legal path into Roth savings, often tens of thousands of dollars a year.
How it works
Some 401(k) plans accept after-tax money above your regular contribution, up to the plan’s total limit, and let you convert it to Roth right away. That can move tens of thousands a year into tax-free growth.
What makes it hold up
- Plan documents showing after-tax contributions and in-plan conversions are allowed
- Contributions by source each year
- The conversion dates
Risks
Low if the plan allows it. Business owners with employees have to pass fairness tests, which can limit it.
Questions to ask your CPA
- Does my plan allow after-tax contributions and conversions?
- How much room is left this year?
Common questions
How do I know if my plan allows it?
The plan has to accept after-tax contributions and allow either in-plan Roth conversions or withdrawals while you're still working. Check the plan documents or ask the plan administrator.
Can I set this up in my own solo 401(k)?
Often yes, but many off-the-shelf solo 401(k) plans don't include these features, so you may need a provider whose plan documents allow them.
Why convert right away?
After-tax money grows taxable until it's converted. Converting quickly keeps that taxable growth close to zero.
What if my business has employees?
Plans with employees must pass fairness tests on after-tax contributions, which can limit how much owners put in.
Cratchit runs every strategy in this library against your real numbers, rates it, and keeps the records that make it hold up. Take a guided tour with the Harpers, a sample family.
Try the demoRelated strategies
Education, not advice. Tax law changes and every situation is different, so confirm the details with your CPA or tax advisor before acting. This page was last checked against tax law as of October 2026, including the 2025 tax law, in October 2026.