The $72,000 401(k) Limit: Can I save more after maxing out my 401(k)?

Someone under 50 who "maxes out" a 401(k) usually contributes $24,500. That is the employee limit for 2026 — but it is not always the limit for the account.

The 2026 limit for all contributions to that person's 401(k) is $72,000. That total can include the regular contribution, the employer's match, and a separate type of contribution made with money that has already been taxed. If the plan also lets the employee move that extra contribution into its Roth account, its future growth can come out tax-free in retirement.

Shazeem is a senior engineer earning $250,000. He contributes the usual $24,500, and his employer adds $7,500. If his plan supports the right features, he can contribute another $40,000 with after-tax money and move it into a Roth account.

That strategy is called a mega backdoor Roth. The name is terrible. It relies on two separate 401(k) limits.

Wait, why can't I just put money into a Roth IRA?

You can, but an IRA has its own contribution and income limits.

For 2026, you can contribute up to $7,500 across your traditional and Roth IRAs. Your ability to contribute directly to a Roth IRA starts phasing out at $153,000 of income if you file as single, or $242,000 if you file jointly. It ends at $168,000 and $252,000, respectively. The IRS publishes the limits each year.

People above those income limits often use a backdoor Roth. They make a nondeductible contribution to a traditional IRA, then convert it to a Roth IRA. This can create an unexpected tax bill if they already have pre-tax money in an IRA, often from rolling over an old 401(k). The IRS calculates the taxable share using all of their IRA money together.

A backdoor Roth changes how the contribution gets into the Roth IRA. It does not increase the $7,500 annual IRA contribution limit.

How can a 401(k) hold more than $24,500?

A 401(k) has two annual limits.

• You can contribute up to $24,500 from your paycheck in 2026. Pre-tax and Roth 401(k) contributions share this limit.
• Your contributions and your employer's contributions can add up to $72,000. After-tax 401(k) contributions can use the room between the two limits.

An employer match uses some of that room. Here is how Shazeem reaches the $72,000 total:

• $24,500 from his regular 401(k) contribution
• $7,500 from his employer's match
• $40,000 from an after-tax 401(k) contribution

An after-tax 401(k) contribution is not the same as a Roth 401(k) contribution, even though both use money that has already been taxed. The difference is the growth: in a Roth, it is never taxed again; in the plain after-tax bucket, it is taxed as income when you take it out.

Left alone, the after-tax account is a bad deal. You get no deduction when you contribute, and its investment growth is taxed as ordinary income when you withdraw it. The Roth conversion is what makes the strategy useful.

How do I move the after-tax contribution into a Roth account?

Your 401(k) plan has to support the conversion. When it does, converting soon after each contribution usually creates little or no tax. You have already paid income tax on the contribution, so only the investment growth between the contribution and conversion is taxable.

Plans usually handle the conversion in one of two ways:

• An in-plan Roth conversion moves the after-tax contribution into the Roth side of the same 401(k). Some plans let you turn on automatic conversions, so each contribution moves as soon as it arrives.
• An in-service rollover sends the after-tax contribution to a Roth IRA while you still work for the employer. If the contribution has already earned money, the plan can send those pre-tax earnings to a traditional IRA at the same time. The IRS explains how the two destinations work.

Either route can move Shazeem's $40,000 after-tax contribution into a Roth account. Once there, the money grows without an annual tax bill, and qualified withdrawals are tax-free.

Not every plan offers after-tax contributions or either type of conversion. Your employer also compares how much highly paid employees contribute after tax with how much everyone else contributes. If the difference is too large, the plan may return part of a highly paid employee's contribution.

Ask your benefits team or plan administrator:

1. Does the plan accept after-tax employee contributions beyond the normal $24,500 limit?
2. Can it automatically convert those contributions in the plan, or roll them into a Roth IRA while you are still employed?
3. How quickly does the conversion happen, and has the plan refunded after-tax contributions after annual testing?

If the answer to either of the first two questions is no, the strategy is not available in that plan.

Why not invest the extra money in a brokerage account?

Both choices start with money that has already been taxed. The difference is how they treat future investment growth.

A brokerage account can owe tax on dividends each year and on capital gains when you sell. A Roth account does not owe annual tax on its investments, and qualified withdrawals are tax-free.

If Shazeem invests $40,000 a year and earns 7%, he has about $1.64 million after 20 years. He contributed $800,000, and the remaining $840,000 is growth.

The chart's middle setting applies a 23.8% federal capital gains rate to that growth when the brokerage investments are sold. That is about $200,000 in federal tax. Its California setting applies a combined 37.1% rate, or about $310,000. The model does not include annual taxes on dividends.

The Roth advantage in this comparison comes from the tax treatment of the growth. It does not depend on guessing your income-tax bracket decades from now.

Can I use the money before retirement?

It depends on where the conversion happens.

Money converted inside the 401(k) remains subject to the plan's withdrawal rules. Many plans limit access while you still work for the employer. When you leave, you can generally roll the Roth 401(k) into a Roth IRA.

A Roth IRA follows a specific withdrawal order. Regular contributions come out first, conversions and rollovers come out next, and investment earnings come out last. The part of a conversion that was not taxable can generally be withdrawn without income tax or the 10% early-withdrawal penalty. Taxable conversion amounts and earnings have separate five-year and age rules.

This makes the contribution more accessible than many people assume, but it is still retirement money. The plan can limit access, the earnings have stricter rules, and withdrawing money does not restore that year's 401(k) contribution room.

When does this make sense?

The mega backdoor Roth becomes relevant after you are already using the normal 401(k) limit and have covered the cash you expect to need in the next few years. Contributing another $40,000 would take more than $3,300 from Shazeem's monthly take-home pay.

Start with the plan, not the maximum. If it supports after-tax contributions and a prompt Roth conversion, calculate the room left after your regular contribution and employer match. Then choose an amount that fits your cash flow and that you can leave invested for retirement.