What's the best way to save for retirement: 401k, Roth, after-tax? What's the difference between Roth and after-tax?

1. Meet your company's 401(k) match. It's free money and you don't pay taxes till you pull it out. Downside of 401k is you could be at higher tax bracket in retirement then when you're starting your career 2. Then fill up your Roth IRA ($5,500), you pay w post tax dollars but you don't have to pay tax when you pull money out at retirement

The SOLE benefit of 401k (traditional or Roth) and IRA (traditional or Roth) is that you are completely shielded from capital gains tax!!! Max them out!!! The "after tax" 401k is a less known option that allows you to contribute additional funds up to a combined $50k per year. Though the terms are not the same as regular 401k, many firms allow you to do an "in service transfer" from your after tax account to your Roth IRA, where the terms are the same. #loopholes Roth and Traditional ultimately have the same result, (Tax * Principle * Time = Principle * Time * Tax) with 3 key considerations when fortune-telling your future income tax bracket: 1. Both: dollar cost average between Roth and Traditional 2. Traditional: for cash flow while you're a heavy spender 3. Roth: to not have to hassle with paying income taxes in the future

@k1, does K allow after tax + in service withdrawals?

D1, when I was looking into it, it was done through ML who manages the 401k's, and they had the forms available when you log into your account. So, to the best of my knowledge, yes, but I have not actually done it.

Yeah i polled the audience here a few months ago, most tried to tell me I didn't know what o was talking about and 18k was the max :).

Haha, seems they don't know what they're talking about 🍻

Is it true that the 401k +%match provided by our firms are considered pension plans(maximum yearly contribution of $18K)? On the flip side, is an IRA traditional/Roth different with a maximum of $5,500 per year, the excess being penalized by a 6% tax per year over the $5,500 amount?

18k+ firm contributions are generally the max for 401k. As k1 mentioned, depending on the structure of your firm's 401k, there are ways to contribute after tax dollars up to ~53k (18k+ firm contribution+ X in after tax dollars). At D, we also have a pension as well, which the firm contributes to on our behalf. The pension is why our 401k match is so low compared to many big industry players. IRA(Trad/roth) is a different tax advantaged vehicle with a max of 5500/yr. I do not know about the penalties of going over that 5500 max.