Betterment is letting self-employed savers move far more money into Roth accounts through its solo 401(k), giving financial advisors a new way to approach high-earning business owners who have already maxed out their standard contributions.
The New York-based company revealed Tuesday that a mega backdoor Roth option is now live in its solo 401(k). The feature is open to investors who use Betterment directly and to advisors who offer the plans through Betterment Advisor Solutions, the firm’s custody platform for registered investment advisors.
A mega backdoor Roth lets participants in eligible 401(k) plans contribute after-tax dollars beyond the usual employee and employer limits and then convert that money to Roth, provided total contributions stay under the plan’s overall annual cap. For 2026, that cap is $72,000, excluding eligible catch-up contributions for those aged 50 and above, against an employee deferral limit of $24,500, according to the Internal Revenue Service.
“The next generation of workers is redefining what a career looks like, and retirement savings options need to evolve alongside them,” said Sarah Levy, chief executive of Betterment. “Entrepreneurs, freelancers and independent professionals deserve a seamless way to maximize their retirement savings."
Eligible account holders submit an after-tax contribution online. Betterment then alerts them once the funds are ready for conversion, and they can start the Roth conversion from inside their account. The company supplies the related tax forms.
Advisors can run the same process for clients. Betterment said its advisor platform tracks contributions against annual limits automatically, prompts advisors when after-tax balances can be converted, and handles contributions, conversions and Form 1099-R reporting.
The company said it plans to extend the capability to its employer-sponsored 401(k) plans in the coming months.
Betterment Advisor Solutions introduced an all-digital solo 401(k) in February 2025, presenting it at the T3 technology conference. Built on the recordkeeping system behind Betterment at Work, the plan offers paperless account opening with no setup fees, digital contributions, spousal participation at no added cost, and both traditional and Roth options.
“The solo 401(k) is one of our most requested new products, and we are thrilled to launch a solution tailored to this market,” Thomas Moore, then head of Betterment Advisor Solutions, said at the time.
In April this year, Betterment rolled the product out to advisors at Osaic and Hub International, giving Osaic’s network of about 10,000 advisors and financial professionals access to the plan. Advisors in those networks were not required to move clients’ other assets to Betterment. Betterment said one in five advisors on its custody platform had opened a solo 401(k) as of December 2025.
Moore told InvestmentNews in April that the product was meant to open doors beyond single-participant plans. “It is a starting place to work with advisors on larger, multi-employee retirement plans, which we also offer through our national retirement partners,” he said.
Betterment manages $70 billion overall in assets, mostly through its retail robo-advice app, and says more than 600 advisory firms use its custody platform. That retail business remains a sticking point for some advisors who may feel a growing sense that the recordkeepers and custodians they work with are now competing with them for investor assets.
In June, Betterment previewed portfolio construction tools, a capital gains budget feature and direct indexing sleeves. It also bared details of a referral pilot meant to steer retail users toward RIAs as their finances grow more complex.
Earlier this month, the company launched unified managed accounts, which let advisors hold Betterment and third-party model portfolios alongside custom strategies as separate sleeves in a single account, with coordinated rebalancing and tax-loss harvesting across them. The model marketplace added portfolios from Goldman Sachs Asset Management, State Street Investment Management and Vanguard earlier this year.
Betterment has also announced a program to waive its platform fee for RIAs that custody with Fidelity and add Betterment as a custodian, through Dec. 31, 2028. The fee normally runs from 0.12% to 0.20% a year.
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