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Real Client Story: Using A Mega Backdoor Roth To Explode Retirement Savings

Jennifer’s Story

Jennifer has been a diligent saver for years. She’s regularly maxed out her contributions to her employer-sponsored Traditional 401(k). But a recent update in her company’s retirement options has left her feeling unsure of how to proceed. Jennifer has been notified of the following:

After-tax contributions: This feature allows 401(k) plan participants to invest additional funds into their Traditional 401(k) account beyond the $20,500 annual IRS 402g contribution limit. Additional funds can be added up to the annual IRS 415 contribution limit of $61,000.

Roth in-plan conversions: This feature allows participants to convert all or part of their pre-tax and after-tax Traditional 401(k) contributions to their Roth after-tax account.

With this new information, Jennifer reaches out to Crafted Finance for help. Her questions include the following: 

  • Does it still make sense to max out pre-tax contributions, or should the initial $20,500 be put towards Roth contributions?
  • If the initial $20,500 are put towards pre-tax contributions, is there a benefit to taking advantage of the new option to convert to a Roth in-plan?
  • Is it a good idea to put more after-tax dollars into the $61,000 limit plan? There’s no immediate need for cash, but eventually she intends to buy a house.

Crafted Finance’s Solution

Jennifer is already approaching her long-term retirement goals at full-speed. But with these new retirement options, she’ll be able to take her savings into overdrive. 

It’s a fantastic “problem” to have! So we start off by telling Jennifer she’s in a position to make a decision based on her own personal preference.

If she continues as is ($20,500 in pre-tax contributions to her traditional 401(K)), she’ll still hit her long-term financial goals. But by making post-tax contributions, and converting to a Roth in-plan retirement account, she’ll be able to knock them out of the park.

Below, in green, you can see the lifetime difference these Roth additions will make: pic-for-mega-roth.png

By 2042, Jennifer will have $733k more in savings. But the truly staggering difference happens over the decades that follow. By shifting to more Roth-based assets, Jennifer has the ability to create an additional $16.5M in lifetime value. 

Still, there are tradeoffs to making after-tax (Roth) contributions:

  • She’ll have to adjust to her take-home pay decreasing,
  • She’ll need to sell shares of stock in her brokerage account, when cash is needed,
  • And she’ll have less cash to put into other accounts (ex: her brokerage) when investing.


Jennifer is excited about her company’s new opportunities for retirement. And she decides to take advantage of some of the long-term benefits the Roth additions offer. With her ideal retirement more than on track, she only goes part way on the full $61,000 annual limit. This way, she’s able to keep more take home pay, and free up cash for other, more-liquid investments.

By working with Crafted Finance, Jennifer feels she has a trusted partner for making the necessary changes to her budget. And she knows there’s help in moving cash around when it comes time to buy a house. 

If you relate to Jennifer’s story, or are facing your own unique challenges preparing for retirement, don’t hesitate to reach out. You can contact us at (650) 336-0598, or schedule a complimentary consultation to discuss your situation. 

*Note: Specific client details have been changed for privacy reasons.

Investment Advisory Services are offered through Crafted Finance, LLC, a registered investment adviser. Please remember that securities cannot be purchased, sold or traded via e-mail or voice message system. This advertisement and any documents, files or previous advertisements may contain information that is confidential or legally privileged.  If you are not the intended recipient, you are hereby notified that you must not read this transmission and that any disclosure, copying, printing, distribution, or any action or omission of this transmission is strictly prohibited.  If you have received this advertisement in error, please immediately notify the sender by telephone at (650) 336-0598 or return and delete the original advertisements and its attachments without reading or saving in any manner.

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Kingston Hollman MBA


Kingston Hollman MBA is a seasoned professional in the field of compliance, known for his extensive expertise and dedication to maintaining regulatory integrity within organizations. With a strong educational background and years of experience, Kingston is a trusted authority in the compliance arena.

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Kelly Gosiewski

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Kelly Gosiewski is a Client Service Administrator known for her unwavering dedication and exceptional client-centric approach. With a career spanning several years in the financial services industry, Kelly has consistently demonstrated her ability to provide top-tier support to clients and ensure their needs are met with the utmost professionalism.

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Joe Wride CFP®

Founder & CEO

Meet Joe Wride, the president and founder of Crafted Finance. With a knack for pension and investment management, insurance, and financial planning, Joe’s all about offering top-notch services without breaking the bank. That’s why he started Crafted Finance!

A proud Finance major from Washington State University, Joe’s got the credentials to back it up as a Chartered Life Underwriter and CERTIFIED FINANCIAL PLANNER™ Professional. Since 2009, he’s been helping individuals, families, and pension plans make sense of their finances. Joe’s even on the board of the Financial Planning Association’s Puget Sound chapter. Check out his LinkedIn profile here.

Joe gets that everyone’s got their own money story. That’s why he’s crafted a unique process to help folks of all stripes manage their finances, whether they’re flying solo, raising a family, or running a company. He’s all about learning and growing to make sure his guidance is just the right fit for his clients.

When he’s not crunching numbers, you’ll find Joe enjoying the Seattle life. He’s into skateboarding at Alki beach, biking, golfing, snowboarding, hiking, and camping. Sports fan? You bet! Joe’s a die-hard supporter of the Cougars, Mariners, Seahawks, and Sonics. But what really matters to him is family time with his wife Jessica, daughter Ocean, and dog Kanga. Joe’s excited to welcome more kiddos into their home through foster care and adoption in the future.

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