In 2023, you can potentially contribute thousands to a Roth using the Mega Backdoor Roth provision within your 401(k).
The Mega Backdoor Roth allows you to contribute after-tax dollars to your 401(k) and convert those dollars to Roth.
The 2023 federal limits for 401(k) contributions are:
- $66,000 if you’re under 50
- $73,500 if you’re 50 or older
The Mega Backdoor Roth is available at companies like Microsoft, Amazon, Meta, Nike, Intel, Google, VMware, Boeing, and others.
We have several different videos to help you understand how this benefit works at specific companies. If you’re unsure whether your company offers this benefit, your HR department can let you know.
The Mega Backdoor Roth allows you to invest thousands to a Roth
In traditional 401(k) plans (pre-tax or Roth) you are limited to how much you can save into your retirement account. In 2023, if you are under 50, the contribution limit for a 401(k) is $22,500. If you are 50 or older the annual limit increases by $7,500 for a total of $30,000.
If your 401(k) plan includes the Mega Backdoor Roth provision, you can contribute thousands of after-tax dollars to Roth. There are two eligibility requirements for the Mega Backdoor Roth 401(k). Your 401(k) plan must allow the following:
- After-tax contributions to your 401(k)
- In-plan Roth conversion
How Does the Mega Backdoor Roth Work?
In this example, we will walk through how the Mega Backdoor Roth works for someone under 50. Most employers contribute some sort of match to an employee’s 401(k) plan. In this example, we assume your employer match is 50% and you are maxing out your 401(k) contribution.
- Your 401(k) contribution: $22,500
- Employer match: $11,250
Total contribution between you and your employer: $33,750
Now we explain the power behind the Mega Backdoor Roth. The Mega Backdoor Roth allows you to contribute additional after-tax dollars up to the federal limit. Your employer will set the limit for how much you can contribute. Some companies allow employees to contribute up to the federal limit, others cap it at a dollar amount or a percentage of an employee’s salary.
As mentioned above, the IRS federal limit for total contributions to a 401(k) for someone under 50 is $66,000 and increases to $73,500 for someone 50 or older.
In this example, we will assume your employer allows you to contribute up to the federal limit. This means there is a difference of $32,250 between what you and your employer originally contributed to the 401(k).
Using the Mega Backdoor Roth provision, you can contribute up to $32,250 in after-tax dollars and convert those dollars to Roth.

Pay attention to the Roth conversion rules in your plan. Some plans will do the conversion for you automatically, some are more manual.
Automatic Roth Conversions:
For plans with this feature, you may see a dropdown on the contribution section within your 401(k) which allows you to state you want to convert these dollars as soon as possible.
Manual Roth Conversions:
You might have to reach out to your 401(k) provider and ask them to convert these dollars for you and request they set up automatic conversions on a go-forward basis.
Mega Backdoor Roth Tax Benefits
Many of you reading this are saving money above and beyond your 401(k) and more than likely you’re saving into a brokerage account (individual account, joint account, etc.). Within these accounts you hold investments, which inevitably over time kick off interest income, dividends, and capital gains. All of these events are taxable within brokerage accounts. Over the long-run, this taxation can create a substantial tax drag on performance.
The Mega Backdoor Roth gives high-income earners access to benefits associated with a Roth. Within a Roth your money grows tax-free. These same dollars, and the growth, are tax-free when accessed in retirement. Having additional money in a Roth account enables you to manage your retirement distributions. This gives you more control over future taxable income.
The Mega Backdoor Roth is One of the Best Benefits Available
If you are on track to max out your 401(k) in 2023 and your company offers the Mega Backdoor Roth Conversion, this is a benefit worth learning more about.