Pros and Cons

As with any financial decision, it’s best to weigh both sides before making an educated decision. Using a Mega Roth Backdoor can have excellent long-term advantages, but you must also consider the price you’re paying up-front.



  • Ability to take advantage of a wider array of investments available outside of an employer-sponsored 401(k). More investment options gives you the chance to pick out investments that are more tailored to your taste, lower expense ratios, etc.
  • Roth Earnings. So long as you take a qualified distribution, you will not pay taxes on what you put in, or the earnings of those funds.



  • Performing the Mega Roth Backdoor will take some research, and will take some time to process. There are a handful of rules that have to be satisfied to be able to process it all, so you’ll have to be careful or you may end up with non-tax-advantaged funds sitting in your 401(k).
  • After-Tax Contributions may have different matching rules than Pre-Tax or Roth funds. Check with your plan recordkeeper to see the rules in your 401(k).