Supersavers who can put $72,000 in their 401(k)s in 2026 should make this smart ‘mega’ Roth move

A tax strategy that allows ambitious savers to set aside several times the standard 401(k) contribution limit and perform a Roth conversion — also known as a megabackdoor Roth — will have an even more generous limit in 2026.

On top of the $24,500 employees can contribute to their retirement accounts next year, high earners in eligible plans will be able to set aside an additional $47,500 in after-tax contributions, for a maximum of $72,000 in 401(k) savings, up from the $70,000 limit in 2025. (The limit includes after-tax contributions, employer matches and salary deferrals.)

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Workers ages 50 to 59 will be able to save an additional $8,000 in catch-up contributions, increasing the 2026 maximum to $80,000. Those ages 60 to 63 may even be able to save up to a whopping $83,500 next year, if their plan permits it.

These rules allow employees to seriously pump up their retirement savings, specifically by converting those after-tax savings to Roth dollars through the three-step megabackdoor Roth strategy.

Essentially, workers with eligible plans can contact their administrator to max out the standard $24,500 contribution to their 401(k) in 2026. They would then ask to defer an additional share of their paychecks as after-tax contributions. The third — and crucial — step: Participants then immediately convert those after-tax dollars to Roth status (some plans can do this automatically, which is optimal), providing the benefit of allowing those funds to grow tax-free and be withdrawn tax-free in retirement.

If those dollars are not immediately converted to Roth, earnings would be considered taxable income when withdrawn, possibly at higher rates than capital gains.

The megabackdoor Roth strategy is beneficial for wealth and tax management, Catherine Valega, financial planner and founder of Green Bee Advisory, told MarketWatch. However, it “can be very confusing to actually execute, so it takes a committed and savvy investor to make it work.”

Americans of all income levels are stressed about retirement saving. In a Harris poll this year of people who earn at least $100,000 in personal income, about 45% said they felt pressured by saving for retirement. Even among those with personal incomes of $200,000 or more, 19% said they do not feel financially on track to retire at or around their planned retirement age, according to a 2024 poll by the Bipartisan Policy Center.

The megabackdoor Roth strategy can be useful for high earners who feel they’ve fallen behind in saving for retirement. Like 47% of private-sector workers, some may have lacked access to a workplace retirement plan at some point in their career. The median retirement-account savings in 2022 for people ages 55 to 64 was $185,000 and for those ages 65 to 74 was $200,000, according to Federal Reserve data.

From the archives (November 2024): This Roth strategy lets elite savers stash $70,000 in their 401(k) in 2025

As the maneuver is all handled through the 401(k), the megabackdoor Roth can be a useful tax strategy for people who either earn too much to save in a Roth IRA (which in 2026 will be a $168,000 income for individuals or $252,000 for married couples) or for people who want to save more than the maximum allowed in a Roth IRA (which will be $7,500 or $8,600 for those ages 50 and older starting in 2026).

“This is a strategy that is so incredibly beneficial for highly compensated employees because they can’t contribute to a regular Roth IRA,” said Monica Dwyer, a financial planner at Harvest Financial Advisors who recently wrote about it.

“If you’re somebody who just got the kids through school, or you’re getting really serious because you’re rounding the corner to retirement, or you’re concerned about what taxes are going to be in the future, you are going to enjoy having the extra money that you can contribute to the Roth through a 401(k),” she told MarketWatch.

Jorie Johnson, a financial planner at Financial Futures, said clients anticipating a bonus before the end of the year have been asking about utilizing the megabackdoor Roth. It’s “a great place to invest an unexpected cash windfall,” she said.

Related: The 2026 401(k) limits are here. Here’s the most you can save next year.

Of course, a megabackdoor Roth is only viable for people who can set aside a lot of money. The median household income in 2024 was $84,000. Most Americans cannot afford to max out their 401(k), let alone contribute after-tax dollars on top of that. Just 14% of people in Vanguard plans saved the $23,000 maximum in 2024, according to Vanguard’s “How America Saves” report.

Also, while it is becoming more common, many 401(k) plans still do not allow additional after-tax contributions. Last year, just 24% of employer plans with Vanguard offered after-tax contributions, up from 19% in 2020, with the option being more common at large employers. Of people who had had access to the feature, only 10% used it, and they tended to have higher incomes ($150,000 or more) and longer tenures on the job (four years or longer), Vanguard found.

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