Making after-tax 401(k) contributions

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Topic overview

After-tax accounts in 401(k) plans allow participants to contribute a portion of their pay on a post- or after-tax basis, which means without lowering their taxable wages for federal income tax purposes.

After-tax contributions appeal to plan participants interested in putting more of their own pay into the plan — pay that is above the annual limits for their employee salary deferrals and Roth contributions.

Use these tools to help your clients maximize their savings in a tax-efficient way.

Is this relevant to my clients?

Individuals could benefit from these tools if they:

  • Are 401(k) plan participants who have maxed out their employee salary deferrals and designated Roth contributions
  • Earn too much to be eligible to make Roth IRA contributions