In 2023, you can contribute up to $66,000 if you’re under 50 and $73,500 if you’re 50 or older to your 401(k) using the Mega Backdoor Roth provision. Employees at Microsoft, Amazon, Meta, Nike, Intel, and many other tech companies have access to this benefit.

The Mega Backdoor Roth enables you to contribute thousands in aftertax dollars and convert those dollars to Roth. This benefit is sometimes referred to as the aftertax Roth conversion within your 401(k).

00:00 Introduction
00:14 Companies that offer the Mega Backdoor Roth
00:26 Mega Backdoor Roth example

If you’re on track to max out your 401(k), this is a benefit worth leveraging. 401(k) contributions increased in 2023. If you’re under 50 you can contribute up to $22,500 and if you’re 50 or older you can contribute up to $30,000. The Mega Backdoor Roth allows you to contribute additional aftertax dollars up to the federal limit.

The Mega Backdoor Roth gives highincome earners access to benefits associated with a Roth. Within a Roth your money grows taxfree. These same dollars, and the growth, are taxfree when accessed in retirement (59.5+ years old).

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How does the Mega Backdoor Roth work?

We will walk through an example for someone under 50 years old who receives a 50% employer match on their 401(k) contribution:

• Employee contributes $22,500
• Employer match: $11,250
• Employee aftertax contribution: $32,250

Our example employee can contribute up to the federal limit of $66,000. This means they can contribute $32,250 in aftertax dollars and convert those dollars to Roth.

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Third Party: Avier Wealth Advisors is not affiliated with any organizations mentioned in this video. There is no guarantee that the information we have provided is accurate. Employees are encouraged to contact their employer should they have any questions regarding their employee benefits.

Taxes: Avier Wealth Advisors does not prepare taxes. The tax ideas presented are meant to demonstrate general concepts rather than precise calculations. We consult with your tax professional for exact calculations.