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The mega backdoor Roth exploits the gap between the $24,500 employee 401(k) deferral limit and the $72,000 §415(c) total additions ceiling. After-tax dollars in that gap, converted immediately to Roth, grow tax-free for life — potentially adding $30,000–$50,000+/year of Roth space. This calculator computes your personal headroom, checks whether your plan supports the strategy, and projects the dollar delta vs a taxable brokerage.
Headroom
$38,700
§415(c) ceiling
$72,000
Lifetime Roth FV
$1,847,038.72
Delta vs taxable
$271,008.69
A 40-year-old earning $220,000 who maxes the $24,500 deferral and receives a 4% employer match ($8,800) has $38,700 of mega backdoor Roth headroom in 2026 — the §415(c) $72,000 ceiling minus deferral and match. Contributing that every year for 25 years at 5% real return compounds to $1,847,038.72 in tax-free Roth dollars at retirement — roughly $271,008.69 more than the same money in a taxable brokerage.
Source: FinCalc server-rendered example using the same formulas as the interactive calculator.
After-tax contributions + in-plan Roth rollover. You have $38,700 of capacity this year.
Check your Summary Plan Description (SPD) or ask HR. All three boxes must be checked (after-tax + at least one conversion path) for the strategy to work end-to-end.
Live read of your plan:
50+ adds $8,000 of catch-up room on top of §415(c). Ages 60–63 add $11,250.
Used to compute employer match dollars.
Pre-tax + Roth combined, capped at $24,500 for 2026.
Annualized match dollars: $8,800. Common formulas: 50% up to 6% of pay = effective 3%; 100% up to 4% = effective 4%.
Profit-sharing, nonelective, safe-harbor — anything beyond the match. Counts against §415(c).
Use real (inflation-adjusted) returns. Taxable drag captures dividends + turnover taxed annually in a brokerage account; LTCG on final gains is applied at ~60% of your retirement bracket.
2026 headroom
$38,700
After-tax capacity available
Section 415(c) ceiling
$72,000
2026 total additions limit
Roth at retirement
$1,847,038.72
Contributing every year for 25 yrs
Delta vs taxable
$271,008.69
Same dollars, brokerage instead
§415(c) caps employee + employer + after-tax contributions to a single 401(k) at $72,000 in 2026. What is left after deferrals and match is the mega backdoor space.
| §415(c) total additions limit | $72,000 |
| − Employee elective deferral | −$24,500 |
| − Employer match (4% of $220,000) | −$8,800 |
| = Mega backdoor headroom | $38,700 |
That headroom is the maximum after-tax (non-Roth) contribution you can make this year before converting to Roth.
Single-year contribution grown for 25 years at 5.0% real return.
Mega backdoor Roth
Pre-tax 401(k) (if it fit)
Taxable brokerage
Contributing $38,700 every year for 25 years.
| Vehicle | Contributions | After-tax @ retirement |
|---|---|---|
| Mega backdoor Roth | $967,500 | $1,847,038.72 |
| Pre-tax 401(k) (counterfactual) | $967,500 | $1,403,749.43 |
| Taxable brokerage | $967,500 | $1,576,030.03 |
Lifetime delta vs taxable: $271,008.69 more tax-free dollars in a Roth than the same money invested in a taxable brokerage.
You have ~$38,700 of mega backdoor capacity. Contributing this each year for 25 years adds ~$1,847,039 in tax-free Roth dollars at retirement — roughly $271,009 more than the same money in a taxable brokerage.
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Internal Revenue Code §415(c) caps the COMBINED annual contributions to a single 401(k) — employee elective deferrals, employer matching, employer non-elective contributions, and employee after-tax (non-Roth) contributions — at $72,000 for 2026 (under age 50). The employee elective deferral limit is a separate, lower $24,500. The gap between those two ceilings — minus whatever your employer chips in for match and profit-sharing — is the mega backdoor Roth space.
The mechanic: contribute after-tax dollars to fill that gap, then convert them to Roth immediately. The conversion happens either through an in-plan Roth rollover (the after-tax balance stays inside the 401(k) but becomes a Roth subaccount) or through an in-service withdrawal (the after-tax balance is rolled out to a Roth IRA while you are still employed). Either path is fine — what matters is converting quickly, so earnings between contribution and conversion stay near zero. Earnings on after-tax contributions are PRE-TAX when converted, so they generate a taxable event proportional to how long they sat unconverted.
Three situations supercharge the mega backdoor: (1) you are years away from retirement (long tax-free compounding), (2) your retirement bracket is HIGHER than your current bracket (you would have paid more tax in retirement anyway, so paying it now via after-tax is a wash with extra growth as bonus), and (3) you would otherwise hold the same dollars in a taxable brokerage with annual tax drag from dividends and turnover. For high-income tech and medical professionals — where current brackets are 32–37% but tax-free Roth space is otherwise limited to a $7,500 IRA — the mega backdoor can compound to seven-figure tax-free balances over a career.
Data and assumptions align with official publications. For verification and current figures:
You cannot execute the mega backdoor Roth without both features (or after-tax + in-service withdrawals). Talk to HR about adding the features — many large employers added them in 2023–2025 because they cost the plan little and retain high earners. If HR will not budge, a regular backdoor Roth IRA ($7,500 max in 2026) and brokerage savings are the fallback. Some employees use a job change to access a plan that allows the strategy.
No — the IRA pro-rata rule (§408(d)(2)) applies to backdoor Roth IRA conversions when you have any pre-tax IRA balance. The mega backdoor operates inside your 401(k) plan, where after-tax contributions sit in their own subaccount with separate basis tracking. You can do the mega backdoor even if you have large traditional IRA balances. (The IRA pro-rata rule could still bite if you separately do a backdoor Roth IRA on top.)
Per paycheck is far better. After-tax dollars accrue earnings while they sit pre-conversion, and those earnings are PRE-TAX when converted (taxable on the conversion). A weekly or bi-weekly auto-rollover ("automatic in-plan Roth rollover") leaves almost no earnings to tax. Annual rollovers can leave thousands of dollars of taxable earnings on the table. Ask your plan if "automatic Roth in-plan rollover" is available.
A 1099-R from the plan administrator for the in-plan Roth rollover, with Code G in box 7 ("direct rollover"). The taxable portion (box 2a) should be only the earnings between contribution and conversion — your after-tax basis (the contribution itself) is non-taxable. If conversions are same-day, box 2a is typically $0 or near-zero. Report on Form 1040 line 5a/5b.
Yes. The §415(c) $72,000 ceiling is PER PERSON PER PLAN. If both spouses work for employers with eligible plans, you each have your own $72,000 ceiling and headroom. Combined Roth capacity can easily exceed $100,000/year for a high-earning dual-income household. Run the calculator twice — once with each spouse's numbers — and sum.
Roth 401(k) deferrals are part of the $24,500 employee elective deferral limit. After-tax (non-Roth) contributions are a separate bucket that fits BETWEEN the $24,500 deferral and the $72,000 §415(c) ceiling — that gap is what creates mega backdoor space. Both use post-tax dollars going in; the difference is which contribution limit they consume. Converting after-tax to Roth (the "mega backdoor" step) gets you the Roth tax-free growth treatment.
Yes. §415(c) caps the COMBINED total of: (1) your elective deferrals (pre-tax + Roth), (2) employer matching contributions, (3) employer non-elective/profit-sharing contributions, and (4) after-tax (non-Roth) employee contributions. A generous match or profit-sharing shrinks your mega backdoor headroom dollar-for-dollar. The 50+ and 60–63 catch-up amounts sit OUTSIDE §415(c), so they expand total room.
If your plan allows in-service withdrawals of after-tax money, you typically have until the end of the calendar year to roll the after-tax balance to a Roth IRA. After separation, you can roll the entire after-tax balance (with no in-service requirement) to a Roth IRA — the IRS has clarified in Notice 2014-54 that you can direct after-tax basis to a Roth IRA and pre-tax earnings to a traditional IRA via a split rollover. Coordinate with both the plan administrator and your IRA custodian.
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