Many tech executives making $400,000 or more have already admitted that a regular Roth IRA is off the table. For 2026, single filers with a modified adjusted gross income above $153,000 are completely excluded from direct Roth IRA contributions. But a growing number are routing tens of thousands of dollars into Roth accounts anyway, using a mechanism that many employees ignore on their 401(k) enrollment forms.
The strategy is called a mega backdoor Roth. This is an intentional feature of the tax code, available to anyone whose employer plan supports it. It stays under the radar because it requires reading the planning document, understanding the type of contribution most people overlook, and executing a conversion at the right time.
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Income: $400,000 to $600,000 annually, above the Roth IRA income eligibility threshold.
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Standard 401(k) deferral limit: $24,500 in elective deferrals for 2026, which can go pre-tax or to a Roth 401(k).
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Section 415(c) aggregate limit: $72,000 in total 401(k) contributions for 2026, employee deferrals, employer matching, and after-tax contributions combined.
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After-tax contribution window: The difference between the total limit and what the employee and employer have already contributed, potentially $36,000 or more after the $23,000 deferral and $10,000 employer match.
The key decision: whether to fill that gap with after-tax dollars and immediately convert to a Roth position within the plan.
For high earners, the calculus leans sharply toward paying taxes at the currently known rates and letting the money go completely tax-free.
Consider a tech executive who contributes $36,000 annually in after-tax dollars. That money is already taxed. Once converted to a Roth within the plan, it grows without any federal tax liability. At 7% annual growth, the $36,000 contributed each year for 20 years balloons to about $1.57 million, completely tax-free on withdrawals.
In a taxable brokerage account, the 10-year Treasury yield currently sits near 4.29%, but for someone in the 37% bracket, the after-tax yield on taxable fixed income is much lower. Every dollar of dividend income, interest, or capital gain distribution is clipped by the IRS. Inside Roth, that drag compounds growth.
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Continued inflation strengthens the case. The Consumer Price Index (CPI) rose to 330.3 in March 2026, up from 320.3 a year ago. Tax-free compounding is one of the few mechanisms that reliably outpaces inflation over decades, because the government cannot cut growth each year.
Option 1: Standard deferral only. Invest the remaining capacity in a maximum $24,500 pre-tax deferred and taxable brokerage account. This works for people who expect a lower bracket in retirement, but for executives with significant pension income, Social Security, or large traditional IRA balances, retirement withdrawals may still be taxed at a higher rate.
Option 2: Roth 401(k) deferrals only. It eliminates the current-year deduction but limits Roth contributions to $24,500, leaving most of the $72,000 annual capacity untouched.
Option 3: Mega Backdoor Roth. Max out standard deferrals, accept an employer match, then contribute the remaining after-tax dollars and immediately convert them to a Roth. The conversion should occur immediately after the post-tax contribution posts, ideally within the same pay period, to reduce the taxable income accruing before the conversion. Some plans allow automatic conversion elections. Fidelity NetBenefits and Vanguard’s plan portal support plans that allow this setup. For high earners with decades of runway, this option stands out from the rest.
Three things will determine whether it works for you. First, your plan must allow after-tax (non-Roth) contributions, a different contribution type from Roth 401(k) deferrals. Many major tech companies, including Microsoft, Google and Amazon, have historically offered mega backdoor Roth capacity in their 401(k) plans, although the plan documents change. Pull up the summary plan description and look for language about “after-tax contributions” and “in-plan Roth conversions.”
Second, execute the conversion immediately. Income accrued on after-tax contributions before conversion is taxable. A conversion of the same duration would put that number closer to zero.
Third, consider it a permanent strategy but not a guaranteed one. The mega backdoor Roth emerged as a potential revenue offset in 2021 budget negotiations, and it could return in future legislation. Contribute aggressively when the rules allow.
Executives at tech firms with the right plans have full access to Roth accounts through Mega Backdoor Roth, regardless of income. For executives at tech firms with the right plans, $36,000 or more in annual Roth contributions is fully within reach, with no income waiver required.
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