The “Mega Roth” is a strategy to put as many Roth dollars as possible in your Rocket Dollar Self-Directed Solo 401(k). The Self-Directed Solo 401(k) account holder would need to open a new trust bank account for “after-tax contributions.” Section 415(c)(1)(A) limits total contributions to Self-Directed Solo 401(k) plans to $56,000 in 2019 (with a $6,000 catch-up contribution for those over age 50). The limit for after-tax contributions in a Self-Directed Solo 401(k) is the difference between the amount already contributed by the employee and the employer, and the Section 415 limit. The Self-Directed Solo 401(k) account owner must have enough self-employed income to make the after-tax contribution. All amounts contributed to a Self-Directed Solo 401(k), employee salary deferral, profit sharing contributions, and voluntary after-tax contributions are eligible for conversion to the Self-Directed Solo Roth 401(k) via an In-Plan conversion or conversion to a Roth IRA.
Note that Rocket Dollar's typical clients are investing in alternative assets, which is why we use trust bank accounts. The bank account gives the client "checkbook control" of the Self-Directed Solo 401(k), making it easy to invest in alternative assets such as real estate and private companies.
This is not tax advice and is for educational purposes only. Please consult with your CPA or tax professional on how to correctly plan your taxes for retirement.