Getting funds into a Roth IRA is one of the top long-term ways to guarantee a comfortable lifestyle without fear over income tax increases. The Mega Roth Backdoor is sometimes a beneficial option, but it’s not for everyone. Being able to use it is dependent upon a few factors outside of your control. With weighing the pros and cons (if you’re eligible) you’ll need somewhere to reference and educate yourself on this backdoor, I hope this can be the place.

The Basics

Overall 401(k) Yearly Limit
(Employee + Employer)

$58,000 (Under 50)
$64,500 (50 or Older)

Personal Contribution Limit (Employee)

$19,500 (Under 50)
$26,000 (50 or Older)

Potential Gap
(Limit - (Employee x 2) )

$19,000 (Under 50)
$12,500 (50 or Older)

The potential gap is an area where many would consider using a Roth Backdoor. I use the term “potential”, as it depends on company match, which ranges considerably. For this example, I set the company contribution as equal to the employee. This is a fairly generous assumption as many employers match/contribute a lesser amount.