What are after-tax 401(k) contributions, and how are they different from Roth?
After-tax contributions are a third bucket some 401(k) plans allow, separate from pre-tax and Roth. Like Roth, they go in with money you've already paid tax on — but unlike Roth, the growth is taxable when withdrawn unless you convert it to Roth first. They let you push total contributions toward the 2025 overall cap of $70,000 ($77,500 if 50+), well past the $23,500 employee deferral limit. On their own they're not especially attractive because the earnings get taxed, but they're the engine behind the mega backdoor Roth: you contribute after-tax, then quickly convert to Roth so future gains become tax-free. Only some plans offer them, so check your plan's features. If your plan lacks this option, an IRA or taxable brokerage may be the better next dollar.
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