Jason Preti, CFP® is the founder of Unleashed Financial LLC, a fee-only fiduciary financial planning firm in the Kirkland/Bellevue area. He works with mid-career tech professionals at companies like Microsoft and Amazon on equity compensation, tax planning, and building a retirement strategy that actually fits their income. Work with Jason
Table of Contents
- The Step Most High Earners Skip
- The Right Order for Your Savings
- What the Mega Backdoor Roth Actually Is
- The 2026 Numbers
- New in 2026: The High-Earner Roth Catch-Up Mandate
- Does Your Employer Offer It?
- The One Step Most People Forget
- Why This Beats Opening a Taxable Brokerage First
- When It's Worth Getting Help
- Frequently Asked Questions
The Step Most High Earners Skip
You max your 401k every year. You’re making good money. The next logical move seems obvious: open a brokerage account and start investing there.
Most people do exactly that. Most people skip a step that could be worth tens of thousands of dollars in tax savings over their career.Mega Backdoor Roth 2026: Microsoft, Amazon & Google Guide
That step is the mega backdoor Roth. It sits between your 401k and youMega Backdoor Roth 2026: Microsoft, Amazon & Google Guider taxable brokerage account in the savings order — and if your employer offers it, you should be using it before you put a dollar into a regular investment account.
Here’s why, and how to set it up if you work at Microsoft, Amazon, or Google.
The Right Order for Your Savings
Before we get into the mechanics, it helps to understand the sequencing.
Think of your investment accounts in three buckets based on how they’re taxed:
Pre-tax accounts (traditional 401k, traditional IRA): You get a tax deduction now. You pay taxes when you pull money out in retirement. Good for reducing your tax bill today.
Tax-free accounts (Roth 401k, Roth IRA): No deduction now. But the money grows completely tax-free and comes out tax-free in retirement. No taxes on dividends, no taxes on gains, no taxes on withdrawals. Ever.
Taxable brokerage accounts: No special tax treatment. You pay taxes on dividends every year. You pay capital gains taxes when you sell. The IRS is involved every single year.
The goal is to fill the tax-advantaged buckets as much as possible before you start filling the taxable one. The order looks like this:
- Max your pre-tax 401k (reduce taxable income today)
- Use the mega backdoor Roth to fill the after-tax bucket and convert it to Roth (build tax-free wealth)
- Then — and only then — open a taxable brokerage account
Most high earners at tech companies jump straight from step one to step three. They don’t know step two exists.
What the Mega Backdoor Roth Actually Is
Your 401k has three contribution buckets, not two.
Most people know about the first two: pre-tax contributions and Roth contributions. Together, those are capped at $24,500 in 2026 (more if you’re over 50).
The third bucket is called after-tax contributions. It is not the same as Roth. The money goes in after you’ve paid taxes on it — just like Roth — but it doesn’t automatically grow tax-free. If you leave it sitting there, earnings on it get taxed as ordinary income when you withdraw. Not great.
The magic happens in the second step: converting those after-tax contributions to Roth. Once they’re in Roth, everything — the original contributions and all future growth — is tax-free.
That two-step process is the mega backdoor Roth. Contribute after-tax dollars to your 401k, then immediately convert them to Roth.
The reason it’s called “mega” is the size. A regular Roth IRA is capped at $7,500 per year in 2026. The mega backdoor Roth can move tens of thousands more into Roth accounts in a single year — depending on your plan and your employer’s match.
The 2026 Numbers
The IRS sets a total annual limit on all 401k contributions from all sources. In 2026, that limit is $72,000 if you’re under 50. It goes up to $80,000 if you’re age 50-59 or 64 and older, and $83,250 if you’re age 60-63.
Here’s how the buckets fill up:
| Contribution source | 2026 amount |
| Your elective deferral (pre-tax or Roth) | $24,500 |
| Employer match (varies by company) | varies |
| After-tax contributions (mega backdoor) | whatever’s left |
| Total limit (under 50) | $72,000 |
| Total limit (age 50-59 or 64+) | $80,000 |
| Total limit (age 60-63) | $83,250 |
Your after-tax room is whatever’s left after your elective deferral and your employer’s match. The bigger the match, the less after-tax room you have — but that’s a good problem to have.
New in 2026: The High-Earner Roth Catch-Up Mandate
If you’re 50 or older and earn over $150,000, there’s something new this year you need to know about.
Starting January 1, 2026, the IRS requires that catch-up contributions be made as Roth — not pre-tax — if you earned more than $150,000 in FICA wages in the prior year. This comes from the SECURE 2.0 Act, and 2026 is the first year it applies.
To check whether this applies to you: pull out your 2025 W-2 and look at Box 3 (Social Security wages). If that number is over $150,000, your 2026 catch-up contributions must go into Roth. You don’t get to choose.
This matters for the mega backdoor Roth because it changes how your buckets fill. Here’s a concrete example.
Example: Sarah, age 52, Microsoft, $250,000 salary
Sarah earned $250,000 in FICA wages in 2025. She’s over the $150,000 threshold. Her 2026 catch-up contributions must be Roth.
| Contribution type | Amount |
| Pre-tax elective deferral | $24,500 |
| Catch-up contribution (Roth — mandatory) | $8,000 |
| Microsoft match (50% of $24,500) | $12,250 |
| Subtotal | $44,750 |
| Section 415 limit (age 50-59) | $80,000 |
| After-tax contribution room | $35,250 |
Sarah converts her after-tax contributions to Roth via in-plan conversion in Fidelity NetBenefits. Her total going into Roth accounts in 2026: $8,000 (mandatory Roth catch-up) + $35,250 (mega backdoor) = $43,250 in tax-free growth.
If Sarah is between ages 60 and 63, her catch-up limit increases to $11,250 instead of $8,000 — giving her slightly more Roth room and slightly less after-tax space.
One important note for Microsoft employees: Microsoft has a true-up match provision. If you front-load your 401k contributions early in the year and hit the $24,500 limit before December, Microsoft will make up the full match at year-end. But not every employer does this. If you’re not sure whether your plan has a true-up, check with HR or your plan documents before front-loading. You don’t want to leave employer match money on the table.
Does Your Employer Offer It?
The mega backdoor Roth only works if your 401k plan allows two specific things:
- Voluntary after-tax contributions
- In-plan Roth conversions (or in-service withdrawals to a Roth IRA)
Without both, the strategy doesn’t work. Here’s the status for the major local tech employers.
Microsoft: Yes
Microsoft’s 401k plan, administered through Fidelity NetBenefits, supports both after-tax contributions and in-plan Roth conversions.
To turn it on: log into Fidelity NetBenefits, go to your contribution elections, and look for the after-tax contribution option. Then scroll to the bottom of the contributions page where you’ll find a dropdown that defaults to “do not convert.” Change it to “convert after-tax to Roth.” It’s easy to miss if you don’t know to look for it.
Amazon: Yes
Amazon’s 401k also supports the mega backdoor Roth. Amazon’s match structure is a bit different — 50% of the first 4% of eligible pay, up to $7,000 in 2026 — which leaves slightly more after-tax room than Microsoft for employees at the same salary.
The setup process in Amazon’s Fidelity portal is similar to Microsoft. Elect after-tax contributions and turn on the automatic in-plan Roth conversion.
Google: Yes
Google’s 401k plan supports after-tax contributions and allows automatic periodic in-plan Roth conversions — monthly or quarterly. Google matches 50% of pre-tax or Roth contributions, up to $12,250 if you max out the $24,500 deferral. Google’s match vests immediately, which is worth noting if you’re considering a job change.
What if your employer doesn’t offer it?
Not every company supports the mega backdoor Roth. Smaller companies in particular often can’t offer it because of IRS nondiscrimination testing requirements.
Smaller companies often can’t offer the mega backdoor Roth because IRS nondiscrimination rules make it impractical when most of the workforce isn’t contributing at similar rates. If highly paid employees are the only ones maxing out after-tax contributions, the plan can fail testing — and the IRS refunds the excess contributions back to those employees, usually late in the year and with a tax bill attached. Big tech companies pass this test easily because a large portion of their workforce earns above the threshold and participates at high rates.
If your plan doesn’t allow after-tax contributions, you have a smaller fallback: the standard backdoor Roth IRA. High earners above the direct Roth IRA income limits — $168,000 for single filers and $252,000 for married filing jointly in 2026 — can still contribute to a Roth by making a non-deductible traditional IRA contribution and then immediately converting it to Roth. The limit is $7,500 per person ($8,600 if you’re 50 or older). It’s a fraction of the mega backdoor’s potential, but it still beats a taxable account for long-term tax-free compounding.
One catch: if you have any existing pre-tax IRA balances — a rollover IRA, SEP-IRA, or SIMPLE IRA — the IRS pro-rata rule means part of your conversion will be taxable. The IRS looks at all your traditional IRA money as one pool and taxes conversions proportionally. It’s not a dealbreaker, but it’s worth understanding before you pull the trigger. A financial advisor or tax professional can help you work through the math.
The One Step Most People Forget
This is the single most common mistake.
You log into Fidelity NetBenefits. You find the after-tax contribution option. You set it up. You feel good. You move on.
But you never elected the in-plan Roth conversion.
The default in most plans — including at Fidelity — is “do not convert.” The after-tax money just sits there. It grows, and those earnings become taxable when you withdraw. You’ve added complexity with almost none of the benefit.
The conversion is not automatic. You have to turn it on separately. In Fidelity NetBenefits, it’s a dropdown at the bottom of the contributions page. It will say something like “convert my after-tax contributions to Roth.” Select that option.
Do it today if you haven’t already. Then log back in after your first paycheck to confirm it worked.
Why This Beats Opening a Taxable Brokerage First
A taxable brokerage account is a perfectly good tool. You’ll probably need one eventually.
But compare what happens to the same dollar in each account over 20 years.
In a taxable account, you pay taxes every year on dividends and interest. When you sell, you pay capital gains taxes on any appreciation. The IRS takes a cut every year, every transaction.
In a Roth account, that same dollar compounds without interruption. No annual tax drag on dividends. No capital gains bill when you rebalance. When you withdraw in retirement, nothing is taxed.
The difference compounds. A dollar shielded from a 24% tax rate on dividends and gains over 20 years ends up meaningfully larger than the same dollar sitting in a taxable account. The longer your time horizon, the bigger the gap.
High-income tech workers are often in the 32% or 37% federal bracket. The tax drag in a taxable account is real. The mega backdoor Roth removes it entirely on every dollar you put through it.
Fill this bucket first. Then open the brokerage.
When It’s Worth Getting Help
The mechanics here are doable on your own. Fidelity NetBenefits has the controls. The IRS has the rules. This article has the framework.
But here’s where it gets complicated fast.
You’re managing RSU vests and the tax withholding gap, ESPP purchase periods, a $150K catch-up mandate that just changed this year, and now an after-tax contribution election that defaults to the wrong setting. Each of those is manageable in isolation. Coordinating all of them in the same tax year — without accidentally triggering a big estimated tax underpayment or leaving the in-plan conversion unelected — is where people make expensive mistakes.
If any of these sound familiar, it’s probably worth a conversation with a fee-only CFP®:
- You have a rollover IRA and want to also do the standard backdoor Roth IRA
- RSUs are vesting in the same year you’re trying to maximize the mega backdoor
- You’re over 50 and not sure whether the catch-up mandate applies to you
- You set up after-tax contributions last year but never confirmed the conversion was actually running
- You want someone to run the full savings order for your specific income, match, and tax situation
A good financial planner pays for themselves pretty quickly when the alternative is leaving $35,000 of tax-free contribution room on the table every year.
Frequently Asked Questions
What is the mega backdoor Roth?
The mega backdoor Roth is a strategy that lets you contribute after-tax dollars to your 401k and then convert them to Roth status — creating tax-free growth beyond the standard Roth IRA limits. In 2026, after-tax contributions can be up to $47,500 depending on your employer’s match and your own deferrals.
Who is eligible for the mega backdoor Roth?
Anyone whose 401k plan allows voluntary after-tax contributions and in-plan Roth conversions or in-service withdrawals. There are no income limits for this strategy. Microsoft, Amazon, and Google employees are generally eligible.
How much can I contribute with the mega backdoor Roth in 2026?
The total 401k limit in 2026 is $72,000 (under 50) or $80,000 (age 50-59). After your elective deferral of $24,500 and your employer’s match, the remainder is your after-tax room. For a Microsoft employee under 50, that’s typically around $35,250.
Do I have to convert the after-tax contributions to Roth?
Yes — and this is the step most people miss. The default setting in most plans, including Fidelity, is to not convert. You have to actively elect the in-plan Roth conversion. Without it, the after-tax money doesn’t get the tax-free treatment.
What is the new Roth catch-up mandate in 2026?
Starting in 2026, employees age 50 and older who earned more than $150,000 in FICA wages in the prior year must make catch-up contributions as Roth — not pre-tax. Check Box 3 on your 2025 W-2 to see if this applies to you.
Does my employer’s match count toward the mega backdoor Roth limit?
Employer contributions count toward the overall Section 415 limit, which reduces your after-tax room. The match itself does not go into the after-tax bucket — it reduces how much you can contribute there.
Should I use the mega backdoor Roth before a taxable brokerage account?
Yes, in most cases. Roth accounts grow tax-free and withdrawals in retirement are not taxed. A taxable brokerage account generates taxable dividends and capital gains every year. For high-income earners, filling the Roth bucket first reduces your lifetime tax bill.
What if my company doesn’t offer the mega backdoor Roth?
You can still do the standard backdoor Roth IRA — contribute to a non-deductible traditional IRA and then convert it to Roth. The limit is $7,500 per person in 2026 ($8,600 if 50 or older). It’s much smaller than the mega backdoor, but it still builds tax-free savings outside a taxable account. Just watch out for the pro-rata rule if you have existing pre-tax IRA balances.
Does the pro-rata rule affect the mega backdoor Roth?
Not for the in-plan conversion. If you’re converting after-tax 401k contributions to Roth inside your plan, the pro-rata rule does not apply. The issue only comes up if you’re also doing the standard backdoor Roth IRA on the side and you have existing pre-tax IRA money — a rollover IRA, SEP-IRA, or SIMPLE IRA. In that case, the IRS treats all your traditional IRA balances as one pool and taxes your conversion proportionally. If you have a large rollover IRA sitting around, talk to a tax advisor before doing the backdoor Roth IRA alongside the mega backdoor.