401k after-tax

Amazon
bqym51

Go to company page Amazon

bqym51
Apr 16 25 Comments

Hey everyone,

I want to put as much as possible in my 401k as after tax contributions and I was wondering if it is allowed to put the full 61k in after-tax and not contribute to “traditional 401k”. Does anyone has an authoritative answer on that? (Ideally quotes from the IRS code)

TC: 330k YoE: 5

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 TOP 25 Comments
  • Lyft
    doulyftbro

    Go to company page Lyft

    doulyftbro
    LOL IRS.gov
    Apr 16 1
  • Oracle
    Non-OCI

    Go to company page Oracle

    Non-OCI
    if your plan allows then yes(roth). 61k includes employer match. But why would you do that?Assuming we are talking about backdoor
    Apr 16 9
  • PayPal
    JfdX87

    Go to company page PayPal

    JfdX87
    61k max includes after tax, pre tax and company match. Upto you how you want to split it. My recommendation is to put max the match and pre tax and then put the balance in after tax and mega backdoor the after tax component. But of course that's a personal choice. You should be able to put all of it into the after tax.
    Apr 16 3
    • PayPal
      JfdX87

      Go to company page PayPal

      JfdX87
      I found a number of websites that reference this. I also spoke to my plan provider (e.g. Schwab, Fidelity, Vanguard). Mine was Schwab.
      Apr 16
    • Amazon
      bqym51

      Go to company page Amazon

      bqym51
      OP
      I mean “up to you how you want to split it” is incorrect since you can only put pre-tax up to 20500. Again I know my question is a bit technical, so I’m really looking for a “sharp” answer either from someone who has done it or explicitly discussed with their CPA (or a link to a ressource that discuss this exact case I.e. contributing after tax over 40500). Thanks for helping out though!
      Apr 16

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  • PayPal
    name -

    Go to company page PayPal

    name -
    You should not do that. Traditional tax benefits is an extra .35*19500. 401k has similar benefits
    Apr 16 2
    • Amazon
      bqym51

      Go to company page Amazon

      bqym51
      OP
      Well in my case I want to invest in a high return asset so I’d rather forgo tax benefits now to get tax free growth. Anyway not asking for advice if I should or not do it but more if it is doable. Thanks for pitching in though!
      Apr 16
    • PayPal
      name -

      Go to company page PayPal

      name -
      Yup, up to you either way, just most Qs are more naive so general advice for normal investments
      Apr 16