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Is A Mega Backdoor Roth Right For You? How To Figure That Out

While investing in a mega backdoor Roth isn’t suitable to all investors, if your profile fits the bill, you can avail yourself of a way to super-charge your retirement savings by converting them into tax-free funds that benefit you and your heirs.


“Using a mega backdoor allows for investors to get more money in Roth [tax-free] accounts” than they could when the retirement savings are limited to pre-tax Roths, Michael Brocavich, the director of financial planning at the Center for Financial Planning in Southfield, Michigan, told me in an email. Other financial advisors who spoke with me added that the “mega” strategy prompts their clients to kick-start their retirement savings.


This article lays out the details, tax consequences, potential big rewards and drawbacks of having part of your retirement funds in a mega backdoor Roth. In addition, it describes the investor profile needed to take advantage of the mega backdoor Roth and cites the differences between the mega backdoor Roth and the backdoor Roth.


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