A mega backdoor Roth is a type of Roth conversion that helps those with an eligible solo 401(k) or standard 401(k) save more for retirement. In the case of a solo 401(k), it creates an additional bucket to keep filling your solo even after you’ve maxed out the account’s employee and/or employer contribution limits. Here’s how.
A quick refresher on solo 401(k) contribution limits
Solo 401(k)s come with an annual overall contribution limit of $72,000 for 2026, but that includes two sub-limits since solo owners can contribute as both an employee and an employer:
- Employee contributions – These are capped at $24,500 for 2026, just like a standard 401(k). Those 50 or older can also make additional catch-up contributions, which sit on top of the $72,000 overall limit.
- Employer contributions – These are capped at roughly 20% of net self-employment income if you're a sole proprietor (a freelancer, for example), or 25% of compensation if you’re an S-corp/C-corp.
In most cases, a mega backdoor Roth comes into play when a saver fills up these two buckets and space remains in their solo’s overall cap. The two-step process—make an after-tax contribution, then convert it to Roth—lets you take advantage of that remaining space.
Less commonly, savers may opt to skip the second bucket of employer contributions altogether. They may, for example, prefer saving for retirement in Roth dollars instead of traditional. Since many solo 401(k)s (including ours) don’t yet support Roth employer contributions, employee contributions and after-tax Roth conversions are their solo’s only Roth options.
As you can see, executing a mega backdoor Roth can get complicated. Adding to the list of considerations is the fact that Roth conversions are irreversible, often have a tax impact at the time of conversion, and can introduce additional penalties for non-qualified withdrawals.
Because of all this, we recommend speaking with an advisor and/or a tax professional before moving forward with one. Betterment is not a tax advisor, and this information is not tax advice.
But once you’re ready to make the move, here’s what to do in the Betterment app.
How to do a mega backdoor Roth in your Betterment solo 401(k) (web browser only)
- Make an after-tax contribution to your solo 401(k) by following the steps below, or use this handy shortcut assuming you already have a Betterment solo 401(k).
- Scroll down to the “Solo 401(k) contributions” section of your Retirement goal’s or Solo 401(k) account’s summary
- Select “Make a contribution”
- Select the “After-tax” contribution type
- Convert that after-tax balance to Roth once we’ve notified you in the Betterment app and via email that it’s ready to convert.