{ "media_type": "text", "post_content": "Just accepted an offer at PwC and noticed they don’t have a Roth 401k but they do have an after tax 401k. Does anyone have an opinion of what is better, pre-tax vs after-tax? I’ll be making around 100k with bonus and currently have about 20k in retirement savings at 25y.o", "post_id": "61648492dda1da0027d38665", "reply_count": 18, "vote_count": 1, "bowl_id": "5b3f7377ab53db00136f7b4c", "bowl_name": "FIRE Financial Independence Retire Early" }

Just accepted an offer at PwC and noticed they don’t have a Roth 401k but they do have an after tax 401k. Does anyone have an opinion of what is better, pre-tax vs after-tax? I’ll be making around 100k with bonus and currently have about 20k in retirement savings at 25y.o

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After tax has no tax advantage at all, just locked until retirement so definitely pre-tax. After tax can be rolled to a Roth IRA as a “mega backdoor” but current legislation in the works may do away with that

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I max out pre-tax but also would like to diversify my tax exposure (1/3 taxable, 1/3 tax-free mega backdoor, 1/3 pre-tax)

Even better, PwC has the after-tax 401k option which is necessary for a mega backdoor Roth. That “loophole” may be closed soon, so I’d take advantage of that to the extent you can, but I couldn’t say if you should just do one or the other. I do pre and post tax, maxing my pre.

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How do you go about doing that

OP when you make you contribution choices, it will ask how much you want to contribute to pre-tax and post-tax. All the post-tax contributions can be rolled over into Roth. That is just at very high level explanation. As always there will be nuances. Nothing that are insurmountable. Mega back door allows total 401k ( pre + post+ employer ) contributions upto 58K per year. Good luck

You have to max your Pre-tax before you can make After-tax elections. After tax provides a higher contribution ceiling and is mostly used for “mega backdoor roth” conversion strategy

Not true. After tax can be first

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I have been making post tax contributions and no pre-tax. Am I getting the full firm match?

Yes

Is there a max contribution limit for after tax?

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