---
title: Mega backdoor Roth — what it means and why it matters | Allocate AI
description: A strategy for putting far more than the normal limit into Roth savings by making after-tax 401(k) contributions and converting them to Roth.
canonical: https://allocateai.io/glossary/mega-backdoor-roth
site: Allocate AI — https://allocateai.io
---

# Mega backdoor Roth

A strategy for putting far more than the normal limit into Roth savings by making after-tax 401(k) contributions and converting them to Roth.

The mega backdoor Roth uses a gap in the 401(k) rules. Your own pre-tax or Roth contributions are capped at $24,500 (2026), but the overall limit on everything going into the account, called the 415(c) limit, is $72,000. Some plans let you fill the space between those numbers with after-tax contributions, and then convert that after-tax money to Roth, either inside the plan or by rolling it to a Roth IRA.

The result is Roth savings well beyond what a Roth IRA or Roth 401(k) alone allows. Example: you contribute $24,500 and your employer adds $9,000 in match. That leaves $38,500 of room under $72,000. If the plan allows, you contribute that $38,500 after tax and convert it. You now have $38,500 more growing tax-free every year, on top of the normal limits.

Two plan features are required: after-tax contributions (not the same as Roth contributions) and either in-plan Roth conversion or in-service withdrawals to a Roth IRA. Many large employers offer both; many small plans offer neither. Converting promptly matters, because growth that occurs while the money sits in after-tax status is taxable on conversion.

The common mistake is prioritizing this over things that come first: the full match, an emergency fund, and HSA space. It is a strategy for people who have already maxed the basics and still have money to save. It is also easy to accidentally over-contribute if the plan does not cap after-tax deposits automatically.

[Try the Mega Backdoor Roth Calculator →](https://allocateai.io/calculators/mega-backdoor-roth)

## Related terms

- [415(c) limit (total 401(k) contribution limit)](https://allocateai.io/glossary/415c-limit) — The cap on everything that can go into your 401(k) in a year from all sources, $72,000 in 2026, including your contributions and your employer's.
- [Backdoor Roth IRA](https://allocateai.io/glossary/backdoor-roth) — A way for people above the Roth IRA income limit to still fund one: contribute to a traditional IRA without a deduction, then convert it to Roth.
- [Roth 401(k)](https://allocateai.io/glossary/roth-401k) — A version of the 401(k) where contributions are taxed now and every dollar, including growth, comes out tax-free in retirement.
- [401(k)](https://allocateai.io/glossary/401k) — An employer-sponsored retirement account you fund from your paycheck, with tax advantages and a yearly contribution limit of $24,500 (2026).

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Allocate AI is a budgeting and financial-planning app: link your accounts, say what you want in plain words, and it writes the plan and stages every change for your approval. Read more at https://allocateai.io or see all pages in https://allocateai.io/llms.txt.