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Welcome to the latest episode of the Physician Cents Podcast, where we explore complex financial topics tailored specifically for physicians. Whether you're a medical student, resident, fellow, or attending physician, you're going to find valuable insights that can help you increase your financial IQ, further your financial journey, and improve your overall well-being. Hosted by Chad Chubb and Tyler Olson, let’s dive in!
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If you are a high-earning physician and you want more money growing in Roth, the Mega Backdoor Roth can feel like finding a secret door in your 401(k). It is not always available, and it is not always simple, but when it fits, it can supercharge your long-term plan. They call it mega because it's big. In this guide, you will learn what it is, how to check if your plan supports it, how to implement it without losing your employer match, and when a plain-old brokerage account might make more sense.
Quick promise before we dive in: we will keep it practical, physician-focused, and clear. No fluff, just the goods.
At a high level, the Mega Backdoor Roth lets you contribute more to your 401(k) than the usual employee limit by using after-tax contributions. Then, if your plan allows it, you convert those after-tax dollars to Roth, so future growth and qualified withdrawals are tax-free.
Two important numbers came up:
So, your employer match and profit sharing get layered on top of your employee contribution. The space between what is already in your account and the $70,000 total is your after-tax opportunity. If your plan allows in-service conversions or rollovers, you can move that after-tax money to Roth quickly.
“They call it mega because it's big.”
Why physicians get excited:
If you have ever visited a forum thread on this, you know the energy. Personal finance nerds just like love to talk about all the rules, the limits, and the paths to get more into Roth. The Mega Backdoor Roth is great, but it is not universal. In many employer plans, only a minority of physicians will actually have access. Think 2 or 3 households out of 10 in day-to-day practice.
The pull is simple. You can get up to $70,000 into your plan in 2025 with the right setup, and a large chunk of that can land in Roth. That is a big win if you are already maxing out pre-tax contributions and want more long-term tax flexibility.
You are filling the gap between your total plan limit and what has already gone in.
Simple example:
How it works, step by step:
For a deeper overview and examples, see this helpful walkthrough on Mega Backdoor Roths for physicians, and a practical how-to on Mega Roth convrsions inside 401(k)s.
Before you touch a single form, confirm your plan actually supports this. If you are W2, contact HR and ask exactly two questions. Yes, they have to be yes, and yes, both of them.
Copy and paste these:
If you are 1099 with a solo 401(k), you will still need these features in your plan document. Off-the-shelf solo 401(k)s sometimes do not include them, so you may need a provider that supports after-tax and in-plan or out-of-plan Roth conversions.
This is the most common point of confusion. After-tax contributions are not Roth contributions, and they are not pre-tax either. They are a third bucket. If your plan does not allow them, there is no Mega Backdoor Roth. Some open enrollment packets mention “after-tax” or “Roth in-plan conversion,” and that is your signal to dig in further.
You want the ability to move after-tax contributions to Roth while you are still employed. Ideally you roll to a Roth IRA, or at least to the Roth side of the plan. If you only have after-tax without in-service conversion, you still have options, but the math is different.
The rules are the same, but the path can look different depending on your setup.
Access varies widely. Some systems are adding after-tax and in-service features more often, but many still do not have them. One huge pitfall we see often: filling the after-tax bucket too fast and unintentionally blocking your employer match or profit sharing. If your account hits $70,000 early, the plan may stop the match. That is a painful mistake.
Pros:
Cons:
Key tip: contact HR early, verify the features, and coordinate the timing so you do not crowd out employer money.
With a solo 401(k), you can design the plan to support after-tax and Roth conversion features. Cookie-cutter solo 401(k)s at big custodians often do not allow the full setup. Look for providers that explicitly support Mega Backdoor Roths, like Carry’s solo 401(k) platform.
Smart add-ons for high earners:
Solo setup snapshot:
You got two yeses from HR, or your solo plan supports the features. Now what? Time to line it up with your cash flow and execute cleanly.
Let us say there are no employer contributions, and you want to fill the remaining space with after-tax and convert it. In 2025, that could be up to $46,500 of after-tax contributions. At a 28 percent bracket, you would need about $64,000 of gross pay to net that amount, which is roughly $5,300 per month less in take-home across a year.
For physicians earning $25,000 to $30,000 per month, this can be very doable, especially if you already have extra cash stacking up in checking. Still, you do not need to max it to benefit. Starting with $5,000 to $10,000 into Roth each year can be a great move. As always, balance is key to financial wellness.
Speed matters. If you contribute $50,000 after-tax and let it grow to $70,000, only the $50,000 basis can go straight to Roth at separation. The $20,000 of gains is pre-tax and will be taxed as income when distributed. If you convert quickly, contributions and gains can both end up in Roth.
For solo 401(k)s that are paired with a cash balance plan, sync contribution targets with your actuary each year. In smaller employer plans, watch out for the lack of auto-stops. You are responsible for not going over the limits.
Verification checklist:
There is a real debate when you only have after-tax without conversion. The Mega Backdoor Roth shines brightest when you can convert quickly. If not, you need to compare it to a plain taxable brokerage account.
When the stars align and you can move after-tax to Roth promptly, everything you contribute, plus future gains, enjoys tax-free growth. You also avoid crowding out pre-tax contributions, which is why high-income physicians love it. The only tradeoff is liquidity. This is still retirement money with plan rules and age-based access.
“If the stars align, it can be special.”
This is where nuance enters. After-tax without conversion grows tax-deferred inside the plan, but future distributions of gains are taxed at ordinary income rates. At separation, you can send your after-tax basis to Roth, and the gains to a pre-tax account.
Compare that to a taxable brokerage account:
Consider:
For a step-by-step playbook on building and operating this strategy, this practical guide to Mega Backdoor Roths in 5 steps is a helpful companion.
You can do this cleanly. You just need to guard against a few common errors.
If your plan supports it and your cash flow is strong, this can be a fantastic way to stack more Roth each year. For tailored help, explore comprehensive planning with WealthKeel LLC or physician-focused guidance at Olson Consulting LLC. If you want a solo 401(k) that supports after-tax and conversions, review Carry’s solo 401(k) features. For ongoing tips, follow Chad Chubb on X and Tyler Olson on X.
The Mega Backdoor Roth can be a powerful tool for physicians, especially when your plan allows quick conversion to Roth and your cash flow can handle it. Start by getting two yeses from HR, then structure contributions so you do not block your match. If conversion is off the table, compare after-tax growth to a smart, tax-efficient brokerage strategy. Ask questions, run the math, and keep your eye on the big picture. A balanced plan, with the right mix of pre-tax, Roth, and taxable, builds flexibility into your future.
The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don’t expect!) about a sponsor, please let us know. We call it the “best of the best” for a reason, and we will maintain that standard for our listeners & viewers.
This information is for general purposes only. This information is not intended to be a substitute for specific professional financial, tax, or legal advice, as individual circumstances vary. Please see a financial professional, CPA, and/or an attorney in regards to your own individual situation.
Wealthkeel’s Advisory Services and Financial Planning offered through Vicus Capital, Inc., a Federally Registered Investment Advisor. WealthKeel LLC, 615 Channelside Drive, Suite 207, Tampa, FL 33602 -- 267.590.9533.
Olson Consulting LLC, Offering Advisory Services and Financial Planning, is a State-Registered Investment Advisor.
A podcast designed specifically for physicians, offering a breakdown of complex financial topics to help you develop your financial IQ, further your financial journey, and improve your well-being. Whether you're a medical student, resident, fellow, or attending physician, you're sure to learn something new that will benefit your journey.
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