Robert Brokamp

speaker

4,317 appearances 39 recordings 3 series first heard Oct 2025 last heard 12 Sep

Robert Brokamp’s voice in public audio — every appearance, attributed to the second.

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recordings per month · last 12 months

Recordings per month over the last 12 months — 39 in all, peaking in Aug 2026 with 5.

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Motley Fool Hidden Gems Investing · Three Lesser-Known But Powerful 401(k) Features · 12 Sep 2026 podcast

And if all those added together don't exceed this other annual limit, then you can make up the difference with another type of contribution known as an after-tax contribution if your plan allows it, and that's a big if. voice-verified

So for example, let's say a 40 year old makes traditional and or Roth contributions totaling $24,500 to their 401k. voice-verified

The employer makes matching contributions of another $5,500 for a grand total of $30,000. voice-verified

You subtract that from $72,000 and you get $42,000. voice-verified

That's how much more the employee could deposit via after-tax contributions. voice-verified

Now, obviously you'd have to be making a pretty good income to be able to save that much. voice-verified

But you know, some people are super savers who are trying to retire early. voice-verified

And you might have a situation where someone's maybe in their 50s or 60s, the kids have left home, the college bills have been paid, and they're trying to play a little catch up with their retirement savings. voice-verified

Now don't confuse these after-tax contributions with Roth contributions. voice-verified

After-tax contributions are post-tax, and the growth on that money is tax-deferred. voice-verified

The distribution of the contributions will be tax-free, but the gains attributed to the after-tax contributions will be taxed as ordinary income. voice-verified

And if that were the end of the story, after-tax contributions would, you know, have some appeal, but many investors might justifiably decide that, you know, instead I'm going to deposit my additional retirement savings in a taxable brokerage account, where the long-term capital gains are taxed at lower capital gains rates than ordinary income, plus the money isn't locked up until age 59 and a half, and more on that a little later. voice-verified

However, this isn't the end of the story. voice-verified

When you're able to transfer the money from your 401k to an IRA, perhaps because you've switched jobs or you're retired, you can roll the after-tax contributions into a Roth IRA and the attributable gains into a traditional IRA. voice-verified

From then on, any growth and distributions from that Roth IRA will be tax-free as long as you follow the rules. voice-verified

Plus, unlike traditional retirement accounts, Roth accounts are not subject to required minimum distributions at age 73 or age 75 if you're born in 1960 or later. voice-verified

But wait, there's more. voice-verified

Depending on the features of your 401k, you may not have to wait until you leave your employer to move money from your plan to an IRA. voice-verified

The rules are going to be somewhat different for after-tax contributions and their associated earnings versus all the other money in your account. voice-verified

So check with your plan provider and make it clear that you're asking about all the types of contributions, earnings, and company matches in your account. voice-verified

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