Backdoor And Mega Backdoor Roths

Backdoor and Mega Backdoor Roth strategies offer powerful ways to boost tax-advantaged retirement savings for high earners. Here are the core points from the lesson:

• A Backdoor Roth involves making a non-deductible IRA contribution and quickly converting it to a Roth IRA, but you must avoid having pre-tax IRA balances or you'll face tax via the pro-rata rule
• Mega Backdoor Roths allow after-tax 401(k) contributions (beyond the regular limit) to be converted into Roth accounts, enabling up to ~$40K in additional Roth savings annually
• The ideal Mega Backdoor setup includes in-plan Roth conversions, which are often automatable and avoid tax on earnings during the transition
• Be cautious of contribution timing to avoid missing employer match benefits—either spread contributions evenly or ensure your plan supports a “true-up” feature

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