Ep 10: After-Tax 401(k) Contributions

Would you like to have more $$ growing in a tax-free account forever? Let me show you how:Maximize your 401(k) contributions, $19,500 for 2021 into your Traditional 401(k) [or maybe the Roth 401k]Add after-tax contributions to your 401(k). Maybe 5%, $10,000 or even $30k. Whatever you are allowed within your employer's plan.Immediately roll those after-tax contributions to the Roth "side" of your 401(k) plan.Enjoy tax-free compounding growth and tax-free distributions in retirement!Your 401(k) account is a great place to save money for your retirement. These accounts are typically used to save from your current income, get current tax deductions and grow your money for retirement.You are limited as an employee to contribute $19,500 to your 401(k). But some employer plans allow you to put in more money "after-tax", which means you don't get the tax deduction on those contributions, but they can grow tax-free towards retirement.But the best part is if you can immediately roll these after-tax contributions over to the Roth side of your 401(k) plan. Since you have already paid taxes on these contributions, there is no change to your tax situation. Now instead of having money growing in a taxable account, it's hidden in a tax-free account!Resources:Individual Retirement Account (IRA): Roth vs. TraditionalWhere should I save money?Find out more about Mike at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/