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PMSfishy t1_j2f4u0z wrote

Reply to comment by Lined_em_up in 401k calculator with after tax by Lined_em_up

The calculator should have an option for that. I'm hoping your plan is after tax in-plan Roth conversion. If thats the case and the calculator you are using doesn't have that, just treat it the same as a Roth IRA.

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Lined_em_up OP t1_j2f78a5 wrote

Ahhh damn there is so much I don't know about this stuff lol. I don't think it's an in plan Roth conversion, or at least I'll have to double check but I don't recall ever seeing that. We had 401k, Roth 401k and after tax options.

I'll have to dig into it more. If it's not an Roth in plan conversion am I making a mistake making after tax contributions even if the company still matches at that point?

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DeluxeXL t1_j2fdt8p wrote

If you are not able to move after-tax contributions into a Roth (IRA or 401k, doesn't matter which) in a short time, the growth will end up make it worse than a regular taxable account.

In a taxable account, most capital gains and dividends are taxed at long term rates, but all growth coming out of the after-tax account are taxed at ordinary rates. So you need to move the after-tax contributions to Roth before they generate too much growth.

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Lined_em_up OP t1_j2fnzre wrote

Ok thanks for the advice. So just say I'm not able to roll it into a Roth what would you recommend I do after I max out my 401k. I'll make too much to contribute to a Roth IRA. I haven't made this good of money before so I'm trying to learn on the fly here.

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