You’ve maxed out 401(k) savings? Try these two backdoors into Roth
May 20, 2026
Donald R. Previe, CFP®
Officer and Associate Financial Planner
Washington Trust Wealth Management
If your income is too high to contribute directly to a Roth IRA, you can still sneak in through the back door … and there’s more than one way to get there. Before you jump in, though, it’s important to understand the rules, especially the often-misunderstood pro rata rule. Ignore it, and your “tax-free” move can suddenly come with a very taxable surprise.
What Is a Back Door Roth IRA?
A “back door Roth IRA” allows you to move money into a Roth account even if your income exceeds the normal Roth IRA contribution limits. You make a non-deductible contribution to a traditional IRA and then you convert those funds into a Roth IRA i.
Because the contribution itself was already taxed, there may be little or no tax due on the conversion in certain circumstances after conversion.
Legacy enhancements and intergenerational planning: Many taxpayers do not consider higher tax rates for their children who may be the ultimate beneficiaries of their Roth account
Door #1: The Typical Back Door Roth
The standard back door Roth IRA generally involves annual IRA contribution limits. For 2026, eligible individuals under age 50 can contribute up to $7,500 to an IRA, while those age 50 and older can contribute $8,600 with the catch-up provision ii.
For many investors, this is a straightforward process when they do not already have large traditional IRA balances. You contribute after-tax money to the IRA and convert it shortly afterward.
But this is where many people get tripped up.
The Pro Rata Rule
The IRS does not allow you to isolate only your after-tax IRA dollars for conversion. Instead, it looks at all of your traditional, SEP, and SIMPLE IRA balances in aggregate and treats them as one big IRA account. If part of that combined balance consists of pre-tax money, then part of your backdoor conversion will likely be taxable.
Here’s a hypothetical situation:
Let’s say you contribute $7,000 of after-tax money into an existing traditional IRA because you want to do a back door Roth conversion. Easy enough if you don’t already have a Traditional IRA, but if you do here’s how to calculate the pro rata rule in 3 easy steps
- Step 1: Determine Total IRA Value: Sum the fair market value of all non-Roth IRAs at the end of the year. Let’s suppose it is $100,000 after the contribution.
- Step 2: Calculate the Exclusion Ratio: Divide the total nondeductible basis by the total value determined in Step 1.
- Step 3: Apply the Ratio: Multiply the conversion amount by the exclusion ratio to find the tax -free part. The rest is included in income.
In conclusion: “only $490. ($7,000 X 7%) of that conversion would be tax-free. The remaining $6,510. ($7,000 X 93%) would generally be taxable.”
That’s the pro rata rule in action. And it catches many investors off guard.
Aggregation and pro rata rules apply to IRA balances. They do not apply to assets held in employer retirement plans like 401(k)s, which leads to the second back door.
Door #2: The Mega Back Door Roth
For investors who want to move substantially more money into Roth accounts, the “mega back door Roth” may be an option. Not all plans allow it, but when available, it can be powerful, particularly for high-income earners who have already maxed out traditional retirement savings opportunities.
The strategy generally works like this:
• Decide how much in pre-tax contributions, if any, up to the maximum of $24,500 in 2026 iii
• Then, make additional after-tax contributions to the plan
• Those additional contributions are then converted to Roth inside the plan. Mega Back Door Roth conversions are more formally called In-Plan Roth Conversions.
Why does this get attention? Because the contribution limits are dramatically higher. Under the 2026 Section 415(c) limit, total contributions to a 401(k) plan — including employee deferrals, employer contributions, and after-tax contributions — can reach $72,000, or $80,000 for those eligible for catch-up contributions iv.
Is a Back Door Roth Right for You?
A Roth conversion, either traditional or through the back door, isn’t right for everyone. Other considerations like your income, cash flow, short-term goals, access to other tax-deferred saving accounts such as Health Savings Accounts and Deferred Compensation Plans all play a role in your optimal savings strategy. Talk to your wealth advisor about tax planning for the long-term today.
Washington Trust Wealth Management Can Help
Your experienced wealth advisors at Washington Trust know that the right investment and savings strategy for you depends on your income, existing IRA balances, tax bracket, and long-term retirement goals. We can guide you through the process, evaluating your current and future tax situation, cash flow, and long-term financial goals to help you determine the right move for you.
ii Retirement topics - IRA contribution limits | Internal Revenue Service
iii Retirement topics - 401(k) and profit-sharing plan contribution limits | Internal Revenue Service
iv COLA increases for dollar limitations on benefits and contributions | Internal Revenue Service
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