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Ready to take your 401(k) savings to the next level?

Ready to take your 401(k) savings to the next level?

| May 11, 2018
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Ready to take your 401(k) savings to the next level?

Should you contribute after-tax money to your 401(k)? Can you? Not all 401(k) plans allow it. Ask your HR department or look in your 401(k) Plan Summary. Look for the phrase “after-tax contributions.” If your plan does not have this option, you might want to inquire as to why not.

After-tax contributions to your 401(k) can help you increase your retirement savings, in a tax-savvy way.

Since these contributions are made after tax, they are eligible to be moved, even while still working, from your retirement plan to a Roth IRA where the growth potential is tax deferred and distributions are not taxable. This strategy is appropriate for someone who will be a high or higher tax bracket in retirement can they currently are.

Normally a married couple who make over $199,000 are no longer eligible to contribute the $5,500 max to a Roth IRA.

Contact us if you would like assistance in determining if this strategy makes sense for your personal situation.

Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. You may want to consult a legal or tax advisor regarding any legal or tax information as it relates to your personal circumstances.

 

 

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