My company allows simple ways to make money online me to contribute after-tax money to my 401(k). should i – flow financial planning

Not all 401(k) plans allow you to make after-tax contributions to your 401(k). Google allows this, for example. Uber does not. So, you need to know whether your 401(k) allows such contributions. You could ask your HR department or look in your simple ways to make money online 401(k) plan summary. Look for the phrase “after-tax contributions.” (tricky, I know.) go on. I’ll wait.

• your 401(k) might allow you to roll after-tax contributions into your 401(k) roth. This is the ultimate, as you can keep all your money in your 401(k) for simplicity’s sake, you can do it while you’re still at your company, and the subsequent earnings on your after-tax contributions also remain tax-free. (check your 401(k) plan to see if this option is available.)

The upshot: you can effectively put an extra, say $31,000, into a roth IRA every year. For those of you earning more than $199,000 (married) or $135,000 (single), in 2018, you are not eligible to contribute to a roth IRA simple ways to make money online at all. And the contribution limit even if you were eligible is simple ways to make money online $5500/year. So, this is an amazing opportunity! Benefits of after-tax 401(k) contributions

“normal” 401(k) contributions are an obvious way to do this. If you’re still eligible for direct IRA contributions (in particular, if you’re eligible to contribute directly to a roth IRA), do that first. Additionally, health savings accounts can be an incredibly tax-savvy to save for retirement, possibly even better than your 401(k) or IRA!

All of this money we’re talking about will be in some sort of retirement simple ways to make money online account. And retirement accounts make it difficult for you to get simple ways to make money online at your money (for good reason). There are taxes and penalties if you withdraw money. But money you have in bank accounts and in taxable simple ways to make money online investment accounts, aka brokerage accounts, you can use anytime for anything, no restrictions. This is why I think investing outside your 401(k) is so important .

You don’t want to trap extra money in your 401(k) every year if it’s a crappy plan, unless you have the opportunity to get the money out simple ways to make money online of it and into an IRA quickly. Fortunately, I find that plans that offer all these extra whiz simple ways to make money online bang features like after-tax contributions also seem to be on the ball when simple ways to make money online it comes to providing a good 401(k).

Maybe you have goals that are more important to you simple ways to make money online than retiring early. Like, say, buying a home, or taking time off with a child, or starting your own business. (and yes, you could justly accuse me of some transference there.) you’re going to be able to support those goals more simple ways to make money online easily with money invested in a taxable account than with simple ways to make money online money in a retirement wrapper.

The longer the money can sit in a roth IRA, and have both the contributions and the earnings grow and simple ways to make money online remain tax-free, the better. (because, remember, when you roll from the 401(k) to the IRA, only the after-tax contributions can go into the roth.)so, the further away you are from retirement, the more this tax-free advantage will benefit you. And therefore the less you need to worry about getting simple ways to make money online the money out of your 401(k) into your IRA super quickly.Now, in the tech industry, you’ll likely be able to get your money into a simple ways to make money online roth IRA quickly anyways, just based on how frequently you change jobs. Also 401(k) plans that allow after-tax contributions often also allow “in-service distributions,” that is, you can roll this after-tax money into a roth IRA while you’re still working for the company.