How to Save Thousands to a Roth in 2023 with Amazon’s 401(k) and Mega Backdoor Option

by | Jun 13, 2023 | Backdoor Roth IRA

How to Save Thousands to a Roth in 2023 with Amazon’s 401(k) and Mega Backdoor Option




In 2023, you can contribute up to $66,000 if you’re under 50 and $73,500 if you’re 50 or older to your Amazon 401(k). You can fully leverage these limits by taking advantage of the Mega Backdoor Roth – a powerful provision within your Amazon 401(k).

The Mega Backdoor Roth allows you to contribute after-tax dollars and convert those dollars to Roth. You can maximize your retirement savings and take advantage of the tax benefits associated with a Roth.

Your regular 401(k) contribution limit also increased in 2023. If you’re under 50 you can contribute up to $22,500 and if you’re 50 or older you can contribute up to $30,000.

Amazon will also match up to 2% of your base salary, which means that if you’re making $325,000 and you put $22,500 into your 401(k), Amazon will contribute an extra $6,500 as a match. That’s free money from Amazon!

00:00 Introduction
00:53 2023 Amazon 401(k) Contribution Limits
01:06 Amazon employer match
01:24 Amazon Mega Backdoor Roth example
02:53 Benefits of a Roth

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Using the Mega Backdoor Roth feature, Amazon employees can contribute up to the federal limit. Here’s an example of how an employee, under 50 years old, earning a base salary of $325,000 can save thousands to a Roth:
• 401(k) contribution $22,500 (pre-tax or Roth)
• Earn Amazon match: $6,500
• After-tax contribution converted to Roth: $37,000
Your after-tax contribution, along with your 401(k) contribution and employer match = $66,000.
The Mega Backdoor Roth is a way for high-income earners to utilize the benefits of a Roth. Within a Roth your money grows tax-free. These dollars and the growth are tax-free when accessed in retirement (59.5+ years old). Having additional money in a Roth account enables you to manage your retirement distributions and taxable income. This gives you more control over future taxable income and which tax bracket you will be in.
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Avier Wealth Advisors
425-467-1011
10655 NE 4th Street, Suite 500
Bellevue, WA 98004
info@avieradvisors.com
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We focus on providing comprehensive financial planning and investment advisory strategies for tech professionals and their families.

Third Party: Avier Wealth Advisors is not affiliated with Amazon. There is no guarantee that the information we have provided is accurate. Amazon employees are encouraged to contact their employer should they have any questions regarding their employee benefits.

Taxes: Avier Wealth Advisors does not prepare taxes. The tax ideas presented are meant to demonstrate general concepts rather than precise calculations. We consult with your tax professional for exact calculations….(read more)


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As the end of the year approaches, it’s important to start thinking about your retirement savings plan for the upcoming year. If you’re an Amazon employee, you have the opportunity to save thousands of dollars to a Roth account through the company’s 401(k) plan and the Mega Backdoor Roth feature.

Starting in 2023, Amazon will be rolling out a new 401(k) plan that offers a Mega Backdoor Roth feature. This feature allows employees to contribute after-tax dollars to their 401(k) and then immediately roll those funds over to a Roth IRA.

The limit for 401(k) contributions in 2022 is $20,500. However, if you’re over the age of 50, you can contribute an additional $6,500 in catch-up contributions. With the Mega Backdoor Roth feature, you can potentially save up to an additional $38,000 to a Roth IRA, depending on your income and the company’s contribution policies.

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Why is this valuable? Roth accounts differ from traditional retirement accounts in that you pay taxes on the contributions now, rather than upon withdrawing the funds in retirement. This means that any growth and earnings in the account are tax-free, and you won’t have to worry about paying taxes upon withdrawing the funds in retirement.

Contributing to a Roth account also helps with tax diversification in retirement. Having a mix of both traditional and Roth accounts allows you to withdraw from a combination of them, potentially lowering your average tax rate in retirement and preventing you from having to withdraw large amounts that may push you into a higher tax bracket.

So, how can you take advantage of this opportunity? Make sure you enroll in the new 401(k) plan when it becomes available in 2023. If you’re already contributing to a traditional 401(k), consider increasing your contributions to take advantage of the Mega Backdoor Roth feature.

Talk to a financial advisor or accountant to determine the best contribution strategy based on your income and financial goals. It’s important to note that Mega Backdoor Roth contributions may not be available to all employees, so make sure to double-check your eligibility with your HR department.

Overall, the new Amazon 401(k) plan with a Mega Backdoor Roth feature can be a valuable tool for increasing your retirement savings in a tax-efficient way. Take advantage of this opportunity by enrolling and maximizing your contributions to potentially save thousands of dollars to a Roth account.

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