Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A mega backdoor Roth strategy depends entirely on the specific employer plan actually supporting after-tax contributions and in-plan or in-service conversions, features far from universal across 401(k) plans, so the strategy's availability has to be confirmed with the specific plan before assuming the calculated contribution room is actually usable.
Before you rely on it
What to check
Confirm directly with plan documentation or the plan administrator that after-tax contributions and the necessary conversion feature are actually supported, before planning around any calculated available room.
The common error
Where people go wrong with mega backdoor roth capacity calculator
Assuming every 401(k) plan supports the mega backdoor Roth strategy simply because the contribution math technically allows room for it. The specific plan features required aren't universal, and calculating available room means nothing if the plan itself doesn't support the strategy.
Sensitivity evidence
How applicable overall plan limit changes the potential after-tax contribution room
| Applicable overall plan limit | Potential after-tax contribution room | Already allocated plan contributions |
|---|---|---|
| $56,000 | $20,500 | $35,500 |
| $63,000 | $27,500 | $35,500 |
| $70,000worked example | $34,500 | $35,500 |
| $77,000 | $41,500 | $35,500 |
| $84,000 | $48,500 | $35,500 |
Every input, tested
Which input moves the potential after-tax contribution room most
| Input | Tested from | To | Potential after-tax contribution room at each end | Swing |
|---|---|---|---|---|
| Applicable overall plan limit | $63,000 | $77,000 | $27,500 to $41,500 | $14,000 (41%) |
| Employee pre-tax and Roth deferrals | $21,150 | $25,850 | $36,850 to $32,150 | $4,700 (14%) |
| Employer contributions | $10,800 | $13,200 | $35,700 to $33,300 | $2,400 (7.0%) |
Two variables at once
Potential after-tax contribution room by applicable overall plan limit and employee pre-tax and roth deferrals
| Applicable overall plan limit \ Employee pre-tax and Roth deferrals | $18,800 | $23,500 | $28,200 |
|---|---|---|---|
| $56,000 | $25,200 | $20,500 | $15,800 |
| $63,000 | $32,200 | $27,500 | $22,800 |
| $70,000 | $39,200 | $34,500 | $29,800 |
| $77,000 | $46,200 | $41,500 | $36,800 |
| $84,000 | $53,200 | $48,500 | $43,800 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Applicable overall plan limit | $70,000 |
| Employee pre-tax and Roth deferrals | $23,500 |
| Employer contributions | $12,000 |
| Potential after-tax contribution room | $34,500 |
| Already allocated plan contributions | $35,500 |
Where the inputs come from
The applicable overall plan limit is the annual cap on all contributions to your account under section 415(c), which the IRS sets each year. Employee pre-tax and Roth deferrals and employer contributions are what already goes in, from your payroll records and plan statement. The space left is what could be contributed as after-tax money, if your plan allows it. Ask your plan administrator whether it permits after-tax contributions and in-plan Roth conversions.
When the result stops applying
The strategy works only if the plan accepts after-tax contributions and permits either in-service withdrawals or in-plan Roth conversions, and many plans do not. The overall limit includes the employer match and profit sharing, so it can be smaller than expected. Contributions may be subject to nondiscrimination testing that limits highly paid employees.
What to compare it with
The 401(k) contribution calculator checks the employee limit, and the backdoor Roth pro-rata page covers the IRA route. Compare account types with the traditional versus Roth IRA calculator. Ask the plan for its summary plan description and confirm the conversion process and any fees.
People also ask
Frequently asked questions
What is a mega backdoor Roth?
It is putting after-tax money into a 401(k) beyond the normal deferral limit and converting it to Roth, allowing much larger Roth contributions than an IRA permits.
Does every 401(k) allow it?
No. The plan must accept after-tax contributions and allow in-plan Roth conversions or in-service withdrawals, so check with the administrator.
What counts toward the overall limit?
Employee deferrals, employer match and profit sharing, and after-tax contributions all count toward the section 415(c) limit for the year.