Most people have never heard of a "mega backdoor Roth" — and that could prove costly, as it can allow some retirement savers with strong cash flow to save more money each year in a tax-free Roth account.
The mega backdoor Roth is a retirement savings strategy that lets some workers — typically high earners who can save more — contribute more to a Roth account than the normal annual Roth IRA or Roth 401(k) deferral limits allow. "It's a way to put tens of thousands of dollars into a Roth account that you wouldn't otherwise be eligible to do," says Tim Steffen, director of advanced planning at Baird.
