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

It gets pretty legalistic and technical. voice-verified

So I'm just going to give you the general gist. voice-verified

401ks are not allowed to disproportionately benefit highly compensated employees. voice-verified

So these plans have to go through annual non-discrimination testing. voice-verified

If not enough of the plans non-highly compensated employees make after-tax contributions, the highly compensated employees can get their after-tax contributions refunded to them at year-end, sometimes substantially. voice-verified

So this is why some plans don't allow for after-tax contributions and why some plans that do cap them at a modest percentage of pay. voice-verified

The bottom line here is that the mega backdoor Roth strategy may not work if you're a highly paid employee who works at a place where most of the other employees aren't saving as much as you do. voice-verified

So talk to your plan provider, ask if you're able to do the mega backdoor Roth and whether the company regularly passes non-discrimination testing. voice-verified

All right, let's move on to our third lesser known 401k feature. voice-verified

And it's come to be known as the rule of 55. voice-verified

So generally speaking, withdrawals from a tax advantaged account before age 59 and a half are assessed a 10% penalty. voice-verified

However, there are many exceptions. voice-verified

Some of those exceptions apply to both IRAs and employer sponsored accounts. voice-verified

Others apply to just one or the other. voice-verified

The Rule of 55 is one of those exceptions, and it only applies to 401ks and similar plans like 403bs and the Federal Thrift Savings Plan. voice-verified

Any employee who separates from service during or after the calendar year the employee reaches age 55 will not owe a 10% early distribution penalty on withdrawals. voice-verified

However, like all things with Uncle Sam and the IRS, conditions apply. voice-verified

First off, the exception only applies to the plan you are participating in during the calendar year in which you turn 55 or older. voice-verified

Doesn't apply to 401ks you had with employers you worked for before turning 55. voice-verified

However, there may be a workaround. voice-verified

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