Maximum 401(k)-Type Plan Contributions
Sara, a higher wage earner, is age 36 and wants to make the maximum contribution to her 401(k)-type plan for the year 2026, including after-tax contributions with which she plans to execute a mega-back door Roth conversion.
Keep in mind that some companies put their own contribution limit on after-tax contributions, and many don’t even offer an after-tax contribution option much less help you facilitate a mega-back door Roth conversion. Read your company’s 401(k)-type plan literature to be sure.
Sara’s company offers a generous match of $15,000 when maxing out regular contributions and no set limit on after-tax contributions. How much can she contribute to her 401(k)-type plan using the maximums for the tax year 2026?
Maximum 401(k) Contributions – 49 and Younger
Since Sara’s employer had no set limit on after-tax contributions, it was computed by subtracting her regular contributions and company match from the 2026 contribution maximum for 401(k)-type plans of $72,000 (72,000-24,500-15,000=32,500).
Maximum 401(k) Contribution – 50 and Older
Instead of age 36, let’s assume Sara is age 50 or older. Now she enjoys an extra $8,000 catch-up contribution along with a higher $80,000 limit on total contributions.
Maximum 401(k) Contribution – Age 60-63
Savers age 60-63 can save even more with the enhanced catch-up contribution.
High Contribution Thresholds
Those high contribution limits might seem like more than enough per year, especially if you’re on the younger side. On the other hand, if you’re striving to become financially independent, want to retire early, or are approaching retirement and are a little behind, those high maximums can be a godsend.
Roth IRAs and 401(k)-Type Plans
For longer-term goals, investing in tax-free accounts is a no-brainer: Tax-free investing yields a higher after-tax rate of return because of their significant tax advantages.
Step-by-step instructions on both the mega backdoor Roth Conversion and the backdoor Roth IRA Conversion are included.