Money Minute with Matt: The After Tax 401k option
You can save more in your 401(k) than you think.
The after-tax 401(k) option for high savers is often overlooked. In 2025, while the employee contribution limit was $22,500, total 401(k) contributions can reach $69,000, including employer match.
Always review your plan rules to see if this option fits your strategy.
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Transcript
Welcome to your Money Minute with Matt where we help you live well financially in 60 seconds or less. Let's talk about one of the most misunderstood features in many 401 plans, the after tax contribution option. This is not the same as Roth.
Think of it as an overflow bucket for high savers. Here's the big idea.
in:That's where you put after tax dollars into your 401k and convert them to your Roth 401 or roll them into a Roth IRA. The contributions have already been taxed, so future growth can be tax free.
This can be a game changer for high earners or anyone trying to build more of a tax free retirement, but not all plans allow it and not all plans allow conversions. So check your plan rules and it fits your financial plan. If you're wondering whether this strategy makes sense for you, reach out anytime.
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