Originally Posted by younginvestor2013
Bump up.....anyone familiar with what Gauss was discussing?
If I may try
I think your referring to after-tax 401K contributions and conversions to Roth IRA. If so, then:
You can contribute up to 17K to a 401K each year and deduct it from your taxable income (employer
reports taxable income with 401K contributions removed already).
After this, if your plan allows and depending on other limits you can contribute after tax money to
the 401K. Since this is already taxed, you can roll it into a Roth IRA without paying taxes. Thus you
can contribute above the 17K limit on 401K and 5K limit on IRA. You will want to convert as soon
as allowed after the contributons so that you don't pay any taxes on any gains.
There are several items that you need to take into account when doing this, and not all 401K plans
will allow this, but it is very helpful if you need to move more into retirement savings.