The "Mega Backdoor" – Moving $40k+ Into a Roth in 2026
While most taxpayers are limited to a $7,000 annual Roth IRA contribution (for those under 50), high earners often find themselves "phased out" by income limits. The Mega Backdoor Roth allows you to bypass these limits and contribute up to $47,500 additional into a tax-free Roth account in 2026.
Why It Matters in 2026
With the 2026 Section 415(c) limit set at $71,500 (or up to $82,750 for those 60–63 using the new SECURE 2.0 enhanced catch-ups), there is a massive gap between your standard $24,000 deferral and the total plan limit.
How to Execute:
Check for "After-Tax" Provisions: Your employer's 401(k) must allow non-Roth after-tax contributions.
Verify In-Service Distributions: You must be able to move these funds immediately into a Roth IRA or convert them to a Roth 401(k) to avoid taxes on the growth.
Fund the Gap: Contribute the difference between your regular deferrals ($24,000) plus employer match and the total $71,500 limit.
Pro Tip: Unlike the standard Backdoor Roth IRA, the Mega Backdoor is typically not subject to the Pro-Rata Rule, meaning you can do this even if you have large Traditional IRA balances.
