Mega-Backdoor roth

Can anyone elaborate on how one might do a mega-backdoor Roth conversion using a solo 401(k)? Also since I have an employer 401(k), how would the employee and employer limits work with both? Specifically if I max out my salary deferral amount in the employer plan, can I then use the solo 401(k) to make just after-tax contributions up to the annual limit and then do the Roth conversion on that amount? Thanks for any insights.



  • You would need to move your one participant 401k plan to a plan document and adoption agreement that supports employee after-tax contributions and in-plan Roth Rollovers (IRR) and/or in-service rollovers. Facilitating the so-called Mega Backdoor Roth
  • None of the mainstream one-participant 401k providers offer such plans and sucb a plan will not be without startup and annual fees.
  • I recommend you do not be lulled by the online websites. They are nothing more than glorified 401k plan document and adoption agreement resellers. You are almost 100% responsible the the one-participant plan compliance. You do not know what you do not know and can get yourself in serious trouble trying to fully self-administer such a plan.
  • I suggest you hire a low-cost true local or national professional third party adminisrator TPA.
  • One such well reviewed low-cost national TPA is Employee Fiduciary. They have a $500 establishment fee for existing plans and a $500 annual fee. I have no connection to EF, but this is well worth the cost at least for the first couple of years doing Mega Backdoor Roths.
  • Remember a one-participant 401k plan is not just a larger IRA. If is a full-fledged 401k plan with the vast majority of plan compliance requirements. You do not want to be having to use the IRS Employee Plans Compliance Resolution System (EPCRS) and have to pay fees and possible sanctions for serious 401k plan errors.

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