News

The mega-backdoor Roth strategy allows high earners to supercharge their retirement savings

Using the mega-backdoor Roth strategy, high earners who want to supercharge their retirement savings can stash up to $70,000 in their 401(k)s in 2025. Photo: MarketWatch photo illustration/iStockphoto

Open-enrollment season is here, and as people plan out their budgets for 2025, some lucky high earners may consider supercharging their retirement savings using a rare but increasingly popular strategy for their employer-sponsored 401(k)s.

The “mega-backdoor Roth” — a three-part strategy that lets employees direct more of their paychecks into workplace retirement accounts than the typical limit — will allow workers to put up to $70,000 into their 401(k)s in 2025. While 401(k) contributions are not tied to open enrollment, “I think [this period] is a good marker for people to evaluate how they’re saving,” Matthew Fleming, a financial planner and senior wealth adviser at Vanguard, told MarketWatch.

Venessa Wong is a personal finance reporter for MarketWatch based in New York City. She previously covered business, inequality and culture during her tenure at BuzzFeed News, and reported on the food industry for Bloomberg. Venessa is a graduate of the Columbia Journalism School and Middlebury College. Follow her on Twitter @venessawong.