Roth IRA income limits block direct contributions for high earners. Two backdoor routes still work, but only if you watch the pro-rata trap.
Filing status and modified AGI decide whether direct Roth is still on the table.
2025 phase-out: $150k-$165k single, $236k-$246k MFJ.
Pre-tax balances trigger the pro-rata rule on backdoor conversions.
SEP and SIMPLE IRAs count too. Roth IRAs and 401(k)s do not.
Requires both after-tax contribution capacity AND in-service Roth conversion.
2025 total 401(k) limit is $70,000. Subtract your employee deferral and employer match. The remainder is your after-tax / Mega Backdoor capacity, IF your plan allows it.
How long until you tap it, and what real return you expect.
Annual Roth capacity: $27,000
Illustrative figures only, based on 2025 IRS limits. Not tax advice. For your specific situation, consult a qualified advisor.
Worth turns this annual capacity into a roadmap. Backdoor and Mega Backdoor sequenced against your 401(k) match, HSA, and tax-aware ordering. Join the waitlist.
If you have any pre-tax money in a Traditional IRA when you do a backdoor conversion, the IRS treats the conversion proportionally. With 90% pre-tax IRA, 90% of the conversion is taxable. The fix: roll the pre-tax IRA into your 401(k) (rollovers don't count for pro-rata), leaving only after-tax basis behind for a clean conversion.
Yes. The IRS has explicitly acknowledged backdoor Roth as permissible. Past tax bills have proposed closing the loophole, so legislative risk is real even if not imminent. As of 2025 it remains valid.
HSA first if you're on a high-deductible health plan. It's the only triple-tax-free account, and FICA savings make it more efficient than Roth dollar for dollar. After HSA, Backdoor Roth for high earners blocked from direct Roth. Mega Backdoor, where available, often takes priority over standard Backdoor by sheer volume.
The Roth IRA contribution limit phases out above ~$165k single / ~$246k MFJ in 2025. Above that, no direct Roth, but the IRS doesn't cap conversions. Contribute to a non-deductible Traditional IRA, convert immediately to Roth. That's the standard backdoor. Mega Backdoor is bigger, up to ~$46,500 per year, but needs your 401(k) plan to allow after-tax contributions AND in-service Roth conversion. Most plans don't. The ones that do offer one of the best benefits in the US.