After-Tax 401(k) vs Roth 401(k) for High Earners
**Roth 401(k)** contributions are after-tax with tax-free qualified withdrawals—subject to annual deferral limits. **After-tax 401(k)** buckets (in-plan Roth conversion or mega backdoor) allow extra contributions beyond the Roth cap if the plan allows.
Step by step
1. Read SPD
Plan must allow after-tax contributions and in-service conversions.
2. Max employer match first
Never skip free match chasing mega backdoor.
3. Track Form 1099-R
Conversions need clean tax reporting.
After-tax 401k vs Roth 401k
Mega backdoor is advanced—Roth 401k is the straightforward Roth bucket.
- Roth 401(k): Simple payroll Roth; annual limit shared with pre-tax deferral.
- After-tax + convert: Higher total Roth funding possible; admin complexity.
Use our calculators
Common mistakes
- Pro-rata IRA issues on rollover
- Double-tax without timely conversion
FAQ
Is mega backdoor legal?
Yes when plan documents support it—confirm with HR and CPA.