High Earners Shift $27,500 Into Roth 401(k)s via In-Plan Conversions in 2026

3 articles · Updated · 24/7 Wall St. · Jun 15

$385,000 earners locked out of Roth IRAs in 2026 can still build Roth balances by making after-tax 401(k) contributions and converting them inside the plan, avoiding the IRA pro-rata rule that complicates standard backdoor Roths.
The opening comes from the 415(c) annual additions cap: a 58-year-old can put up to $80,000 into a plan in 2026, and after maxing a $24,500 deferral, an $8,000 catch-up and a $20,000 employer contribution, still has $27,500 of after-tax room.
In-plan Roth rollovers keep the tax hit minimal because only earnings between contribution and conversion are taxed; with payroll-by-payroll or weekly auto-conversions, that spread is often close to zero.
SECURE 2.0 also tilts savers toward Roth in 2026: workers 50 or older with more than $150,000 in 2025 W-2 wages must make the $8,000 catch-up as Roth, adding roughly $2,560 in federal tax for someone in the 32% bracket.
Execution depends on plan design: participants need both after-tax contributions and in-plan Roth conversion features in the SPD, and plans without automatic conversion leave more interim earnings exposed to ordinary-income tax.