{ "media_type": "text", "post_content": "What's the best way to save for retirement: 401k, Roth, after-tax? What's the difference between Roth and after-tax?", "post_id": "58dfe420d4c96e0016781d31", "reply_count": 9, "vote_count": 3, "bowl_id": "552d1d24dc1c586b09d2d051", "bowl_name": "Consulting", "feed_type": "crowd" }

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

like
Posting as :
works at
You are currently posting as works at

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

like

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

like

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

like

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.

like

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

like

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 :).

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.

You're not penalized for going over the Roth IRA max, you just have to withdraw it

Related Posts

Does Boston Consulting Group have the following? - HSA - After tax contributions to 401k w/ in plan Roth conversion I’m joining in a few weeks and doing some planning on how to adjust my existing accounts/strategy. Thanks!

like

A friend of mine is worth $20M because of RSUs he got in a startup. I have been feeling really jealous of his accomplishments; the fact that he can retire any day now, have as many kids as he wants, and his $$$ home. This has made me depressed and resent him. Does anyone have any tips for me to overcome the jealousy?

likefunnyhelpful

I am thankful for Slalom staff aug for allowing my low functioning self to fly under the radar. I used to be a Big 4 hardo, but COVID fatigue/languishing has me ready to retire. The hardest part of my job is convincing peers that a handful of emails, meetings, and deck updates each day = 40 billable hours/week.

likefunny

At what age are you planning to retire?

like

I’m EY cybersecurity and was selected for an independence audit at EY. They are asking for our 2020 taxes with only social security num blanked out. They also want copies of all of my 401k and brokerage account statements. I don’t have a problem showing which holding I have, but when I joined I was told that it’s what you have, not how much you have. I was very thorough when I initially filled out my forms so I don’t think I have things they’ll find, but I’m about to look for a new job. EY

like

Do you contribute to a 401k? If so, why?

likehelpful

My employer utilizes T Rowe Price for 401K. I have a 94% stock 6% bonds and I’m down -5% since i started putting money into it. Question is how can I move my money to not lose money or do i just leave it and believe the market will recuperate it.

like

I want to start investing outside of my 401k and I don’t know where to start. When I try to research I feel overwhelmed by all the information/terms and the conflicting advice. Are there sources of info that you trust? Preferred types of investments/accounts? I currently have all my money sitting in a regular checking account.

like

Is there a difference between 250k salary and 400k salary? Both salaries are watching spiderman on opening night. Both salaries have food on the table and a roof over their heads. One has a 65in tv vs the other has 75in. One drives a BMW the other a Tesla. I make around 250k and to increase my salary I will have to work a lot more. Is it really worth having more money, at some point it is just a number and quality of life doesn't improve. In fact it could be worse with the extra hours.

likefunnyhelpful

I need thoughts and advice on being an “aging” female tech leader. I’m only 58 but am feeling like I am being set aside by the good ole boys club at my current firm. Part of me wants to say “whatever” and coast until I retire (I never have coasted in my career). Another part of me says “keep fighting”. Anyone else experiencing this and how did you deal with it?

likehelpful

Would you rather make $120k a year while working 40 hours a week or $350K while working 70 hours a week. Please do not say it depends. Answer strictly on those two variables.

like

This will either make me feel sad or okay.... at 25, how much did you have saved? Not including 401k.

likesmart

Anyone else watching their 401k take a hit. Investment Advisor said to leave it, because it's for the long term. Thoughts?

like

Happy I found this community and love reading through everyone’s comments. It inspired me to post my NW. I would love to hear your thoughts on how I could be doing better to get closer to FIRE. Background: 25 yo female, renting in a big city, no debt. Was saving up to buy RE, but am now deciding to hold off until next year. What should I do with what I saved up? Definitely thinking of contributing some to 2020 Roth IRA- any ideas of what I should be investing in? Appreciate any feedback!

Post Photo
like

I have money in my traditional IRA and have been contributing to my 401k with post tax contributions. Every so often I move money from my 401k to my Roth IRA since I can’t directly contribute to it. Assuming I had no gains on the after tax 401k contributions, will I be taxed on part of the money since I have money in my traditional IRA? I keep reading that you shouldn’t have a traditional IRA open when you do the backdoor roth. Not sure if it’s related to the pro data rule.

like

My current salary is 113k and i contribute 7% to 401k, how much %age i should ideally contribute to get maximum based on company matching

likehelpful

I’ve been thinking about pulling my 401k/WealthBuilder balance out of stocks to “ride out the recession”. I would keep my allocations from each paycheck the same. Anyone having similar thoughts? Cont.

like

I just learned about ‘buy in’ concept when you are promoted to a partner level. And how for the first few years partners can only may $200-300k depending on the geography. I am 36 year old, and a manager at Big 4. Does it truly make sense for me to pursue partnership purely from a perspective of maximising my earnings considering I become partner around 45/46ish and will have to retire around 60ish. Or jumping to an industry opportunity (director) level right now makes more sense?

likefunnyhelpful

I have an offer from IBM and Deloitte. Both are paying almost same. Only difference is 401K. Which one to choose? What about the GC process in IBM and Deloitte? Who will process soon?

like

EY independence and 401k/brokerages Will I be able to keep my 401k accounts with TD Ameritrade and Empower? I also have brokerage accounts with charles schwab, fidelity, and robinhood. I’m aware I will have to sell securities of companies that EY audits, but if EY audits TDA or Charles Schwab for example, do I have to close my accounts with them?

like

Additional Posts

Make sure your hard work is protected. File or register with the U.S. Patent and Trademark Office or U.S. Copyright Office before it's too late. Complete our easy questionnaire and we'll help you quickly submit your application. Use your INNOVATOR code for 10% OFF.*

Post with company

like

Part of the crowd. The briefcase doesn't show in post details though.

like

Ah now it did.

like

Best book you’ve read in 2018?

likesmart

50 segments through end of May is depressing. I much prefer renewing status through miles than segments...

like

A friend of mine is worth $20M because of RSUs he got in a startup. I have been feeling really jealous of his accomplishments; the fact that he can retire any day now, have as many kids as he wants, and his $$$ home. This has made me depressed and resent him. Does anyone have any tips for me to overcome the jealousy?

likefunnyhelpful

I was just told by my manager that taking a 2 week vacation would look bad while staffed on a client project. I’ve already been on this project for over a year and another extension is coming. Take 1week, he said. My husband and I planned to travel to Europe from the west coast which is expensive and time consuming. We don’t want to limit ourselves to 1 week. Has anyone else run into this type of situation? Can management really dictate how long you can get away - if you have the days accrued?

like

To the people who don’t want to forgive student loans, but do believe in funding welfare programs (specifically the ones that only low income people have access to.. not funding for schools/ libraries), why is it that you don’t believe in helping people who exhausted every opportunity to get an education and attempt to be a productive member of society, but you do believe in helping the other people? I’m genuinely curious so please don’t be disrespectful in the comments.

funnylike

Cat thread :)

Post Photo
likefunnyupliftingsmart

When the client calls and says " you weren't active on teams so I just wanted to check what's going on" Sorry I stepped away from my computer for 3 seconds 🙄

likefunny

I’m about to start at McKinsey next month. I’m reading over their Personal Investment Policy. Will I need to divest my holdings that aren’t on the pre-cleared list during the 60 day grace period for new hires? Also, if not how does that apply to securities that pay a dividend? McKinsey & Company

like

Can anyone comment on the differences in case interviews between BCG and McK? Gone through BCG and about to go through McK but dont know what to expect

like

Is McKinsey traveling to clients? What’s the policy for WFH?

like

I’m EY cybersecurity and was selected for an independence audit at EY. They are asking for our 2020 taxes with only social security num blanked out. They also want copies of all of my 401k and brokerage account statements. I don’t have a problem showing which holding I have, but when I joined I was told that it’s what you have, not how much you have. I was very thorough when I initially filled out my forms so I don’t think I have things they’ll find, but I’m about to look for a new job. EY

like

Do you contribute to a 401k? If so, why?

likehelpful

My friend just had his mid year review at KPMG. His manager told him he should consider other job. Said he looked like he didn't want to be here and the whole team felt it the entire time. 😂😂😂😂

like

We just drove past Grant Thorntons NYC office, I got so happy when I recognized it! I was like, my people work here..except I know no one who works there! #beingcheesy #fbcommunity

like

Im about to be let go for performance. I didn't hit the utilization targets as well as my peers, and wasn't able to do so over the past few months that I was on a PIP. I joined PwC out of college a couple years back. I was psyched to get my offer, but since joining I never really felt welcomed to the team. No one ever took me under their wing and I made a lot of acquaintances but no friends. My closest coworkers left the firm after issues with the culture or were let go. cont...

like

Is there a difference between 250k salary and 400k salary? Both salaries are watching spiderman on opening night. Both salaries have food on the table and a roof over their heads. One has a 65in tv vs the other has 75in. One drives a BMW the other a Tesla. I make around 250k and to increase my salary I will have to work a lot more. Is it really worth having more money, at some point it is just a number and quality of life doesn't improve. In fact it could be worse with the extra hours.

likefunnyhelpful

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
Download Fishbowl to see what others are saying
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

For account settings, visit Fishbowl on Desktop Browser or

General

Legal