Hi ReP, please get a copy of the actual Summary Plan Description for your 401k and read it.
For a successful Mega Backdoor Roth, your plan needs to allow both an after-tax contribution AND in-service withdrawals (conversion is an option, but does not give you the same flexibility).
Generally, here are the steps for Mega Backdoor Roth:
- contribute your after tax dollars
- as soon as you can, do a direct rollover of the after-tax contribution to a Roth IRA
- to the extent your after-tax contributions have any earnings, rollover those earnings to a traditional IRA at the same time
Alternatively, you can do an in-plan conversion of the after-tax contributions to Roth, as long as your plan has investment options that you want to invest in.
Again, the wording below seems to be an over-simplification of the process. You need to look at the actual plan document to understand how it would work in your particular 401k.