VIDEO: Roth vs After-Tax in Your 401(k): What’s the Difference?

  • Retirement Funding
What’s the difference between Roth and after-tax contributions in your employer-sponsored retirement plan? While both are funded with money you’ve already paid taxes on, they work very differently when it comes to growth and withdrawals.

In this video, you’ll learn:

  • How Roth contributions are taxed now and withdrawn tax-free later
  • How after-tax contributions are taxed now but earnings are taxable in retirement
  • When in-plan Roth conversions can turn after-tax money into tax-free growth
  • Why understanding the difference can help you build a better retirement strategy

 

If your 401(k) or 403(b) offers both Roth and after-tax options, this quick guide will help you decide how they might fit into your financial plan.

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This material is intended for educational purposes only. You should always consult a financial, tax, or legal professional familiar with your unique circumstances before making any financial decisions. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns. Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost. Dorval & Chorne Financial Advisors is a registered investment adviser with the SEC. Registration of an investment adviser does not imply a certain level of skill or training.

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