The $46,500 Roth Strategy Many High Earners Overlook

The Mega Backdoor Roth lets high earners contribute an extra $46,500 into tax-free retirement accounts.

The Mega Backdoor Roth lets high earners stash an extra $46,500 into tax-free retirement accounts.

Here's how it works:

Most people know about the $23,500 401(k) limit for 2025, but if your plan allows after-tax contributions, you can contribute up to $70,000 total between you and your employer.

Let's say you max out your $23,500 employee deferral and your employer adds $10,000. That's $33,500.

You could potentially contribute an additional $36,500 in after-tax dollars to reach that $70,000 cap.

Once those after-tax dollars are in your 401(k), you convert them to Roth within the plan. This is called an in-plan Roth conversion.

The after-tax contributions themselves aren't taxed again during conversion, but any earnings are taxable. That's why many people convert immediately to minimize the tax hit.

After conversion, everything grows completely tax-free.

The catch? Not every 401(k) plan allows this feature, so you'll need to check your plan document or ask HR before you can use this strategy.

For help maximizing your retirement savings strategy, schedule a 401(k) review, click here.