Robert Brokamp

speaker

4,411 appearances 40 recordings 3 series first heard Oct 2025 last heard 2d ago

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 — 40 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

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

If you're able to move the money, transfer your after-tax contributions to a Roth IRA and the taxable growth to a traditional IRA. voice-verified

And there's one more way that you can turn after-tax contributions into Roth assets, known as an in-plan Roth conversion or also known as an in-plan Roth transfer. voice-verified

This allows you to turn non-Roth assets into Roth assets within your 401k while you're still working for the same employer. voice-verified

Again, this is only possible if your employer makes in-plan Roth conversions available in your plan. voice-verified

Now, when you convert traditional pre-tax assets into Roth assets, the amount you convert does get added to your taxable income in the year you did the conversion, resulting in a higher tax bill. voice-verified

But with after-tax contributions, you already paid the taxes. voice-verified

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