Author Topic: Mega Backdoor Roth in Practice  (Read 1070 times)


  • Stubble
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Mega Backdoor Roth in Practice
« on: July 15, 2019, 12:18:49 PM »

Trying to get the mega backdoor roth set up.

I contribute the max to my 401k, (roughly 15% of my salary).  I also get a 6% match from my employer ($7,800).

I can contribute up to 50% of my salary with anything above the $19,000 going to a Roth 401k. 

My question is, if I contribute 15% (plus 6% match) to my pre-tax 401k then another $29,600 to a Roth 401k (keeping in line with $57k max), what other steps must I take?  This is the part where I get somewhat confused about in service withdrawals and the timing of those.  Any help is much appreciated!


  • Walrus Stache
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Re: Mega Backdoor Roth in Practice
« Reply #1 on: July 15, 2019, 12:24:57 PM »
Megabackdoor Roth is a 2-step process.

1. You contribute amounts above $19K to your Traditional 401K - these deferrals are not tax deductible. Most of the time this is referred to as "after-tax" contributions. Not the same thing as Roth contributions.

2. You then, immediately if possible, convert those non-deductible contributions to the Roth 401K account. Or, even better to your Roth IRA if your plan allows in-service withdrawals. Or in a worst case, you convert to your Roth IRA and pay any taxes owed when you separate from the employer.
« Last Edit: July 15, 2019, 12:28:02 PM by dandarc »


  • Pencil Stache
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Re: Mega Backdoor Roth in Practice
« Reply #2 on: July 15, 2019, 12:26:06 PM »
With the mega back door Roth is not the same as after-tax.

You can contribute extra past the 19K limit in after-tax, not Roth.

You then need to roll over the after tax contributions to a Roth account. This is the part where your plan must allow some kind of in-service roll over option.


  • Magnum Stache
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Re: Mega Backdoor Roth in Practice
« Reply #3 on: July 15, 2019, 01:21:07 PM »
My guess is your confusion may stem from a failure to recognize that a Roth 401(k) is not the same thing as an after-tax 401(k). Pre-tax/traditional 401(k) and Roth 401(k) share the same salary deferral amount (2019 = $19k), so you can't contribute anything extra to Roth 401(k) after maxing out your Pre-tax/traditional 401(k). You can, however, (if your plan allows it) contribute additional to an after-tax 401(k) which you can then (again, if your plan allows it) convert to the Roth 401(k) or to an outside Roth IRA while you're still working. Not all plans allow both after tax contributions and in-service in-plan conversions or in-service withdrawals (to an IRA), but when they do this is how it's done.