Far fewer know its bigger sibling, and that gap is quietly widening the retirement divide between people who can save six figures — and everyone else.
The maneuver is called the mega backdoor Roth, and it exploits a rule most 401(k) savers never touch.
It has nothing to do with the $7,000 IRA limit you already know.
It runs through your workplace plan instead.
The IRS caps total 401(k) contributions — your money plus your employer's — at $69,000 in 2024, up from $66,000 last year.
You can only salary-defer $23,000 of that ($30,500 if you're 50 or older).
But if your plan allows after-tax contributions plus either in-plan conversions or in-service withdrawals, you can funnel the remaining gap into a Roth bucket.
That's potentially $46,000 or more in post-tax money growing tax-free.
Roth money comes out tax-free in retirement, and there are no required minimum distributions.
For someone expecting higher taxes later — or a big tax-deferred balance already — moving dollars into the Roth column can pay off.
The catch is that your employer has to offer it.
Vanguard estimates only about 20% of workplace plans support the full maneuver, though that share is climbing fast as large employers add the feature.
Ask HR one question: does our plan allow after-tax contributions with in-plan Roth conversions?
If the answer is yes, watch the conversion timing.
After-tax dollars earn gains before you convert, and those gains are taxable as ordinary income.
Many plans now allow automatic same-day conversions, which minimizes the tax bite.
If yours doesn't, convert manually and often — quarterly at minimum.
There's another reason this matters right now.
The mega backdoor Roth has survived multiple tax-overhaul proposals, but it keeps landing on Washington's wish list.
Lawmakers floated capping large retirement accounts during recent budget debates.
Nothing has passed, but the feature's survival isn't something to assume forever.
One more number worth knowing: the after-tax limit itself.
For 2024, the IRS allows total additions of $69,000, and that ceiling applies across the board — not per account.
If you switch jobs mid-year, track your year-to-date contributions carefully to avoid an excess that triggers penalties.
It only makes sense once you're maxing a traditional 401(k), clearing high-interest debt, and holding an emergency fund.
For high earners who've already checked those boxes, it's one of the few remaining legal ways to shelter a serious chunk of income.
The real takeaway isn't the dollar figure.
It's that the tax code now rewards people whose employers offer sophisticated plan features — and leaves everyone else with the standard option.
That's a structural gap worth understanding, whether or not you can use it.
Remember, this is general information, not tax advice.
Your bracket, state rules, and plan documents all change the math.
Final Thoughts
Talk to a CPA before moving money you can't easily undo.