Retirement Planning • Tax Strategies

The Mega Backdoor Roth Strategy for Business Owners

If you're self-employed, operate a corporation, or are a partner with no full-time employees, the mega backdoor Roth may allow you to save up to $70,000 ($77,500 if age 50+) into Roth accounts—far more than the standard Roth IRA or backdoor Roth limits.

What Is the Mega Backdoor Roth?

This strategy uses a solo 401(k) designed with:

• After-tax contribution capability

• In-service withdrawals, or

• In-plan Roth conversions

These features enable you to convert large after-tax contributions into Roth savings—legally and efficiently.

How the Contributions Work

You fund the mega backdoor Roth using two sources:

• Elective Roth contributions: Up to $23,500 ($31,000 if age 50+)

• Voluntary after-tax contributions: Up to $46,500 in 2025, depending on income and your plan’s design

Then you convert or roll over the after-tax portion into Roth status.

Why the Mega Backdoor Roth Is Powerful

• Tax-free growth for life

• No required minimum distributions

• Flexible estate planning

• Heirs receive distributions income-tax-free (10-year rule applies)

• Greater control over long-term tax planning

Even if traditional vs. Roth outcomes look similar under constant tax rates, Roth accounts provide far more flexibility—especially if rates rise in the future.

Who Should Consider This Strategy?

This is one of the most valuable tools available to:

• Self-employed individuals

• Owners of corporations with no full-time employees

• Partners in partnerships

If you prefer Roth-style savings, the mega backdoor Roth may be a game changer.

Want to Implement a Mega Backdoor Roth?

We’ll design your solo 401(k), confirm eligibility, and ensure your conversions are executed in a tax-smart way.

Book a Retirement Strategy Session