One of the key advantages of a 401K is the ability to contribute on a pre-tax basis. This means that the money you contribute to your 401K is deducted from your taxable income, reducing your overall tax liabilit
This leaves a gap of $28,750 that can be filled with an after-tax contribution and then converted within the 401(k) to a Roth. While you get no tax deduction today for these additional contributions, the power of the Roth account is that the money grows tax-deferred and is tax-free ...
Thecontribution limiton 401(k) plans in 2024 is $23,000, with workers 50 and older allowed to set aside an additional $7,500 tocatch up on retirement planning.
Any money you contribute to aRoth401(k) is “post-tax,” meaning you’ll owe income taxes on the money upfront. And then your funds will grow tax-free until you withdraw in retirement, at which time you won’t owe a cent in taxes. You can use our401k calculatorto see how much mo...