4 ms·
Not in the US. IRA contributions are post tax. 401k contributions are pre-tax. Depending on where you live this may be semantics as they may be the same program
by wonderwonder 5y ago
Not in the US. IRA contributions are post tax. 401k contributions are pre-tax. Depending on where you live this may be semantics as they may be the same program with different names.
- colinmhayes 5y agoThis is wrong. Both 401k and Ira have roth variants which are post tax. The normal variants are pre-tax.
- nybble41 5y agoNon-Roth 401ks can have before-tax and after-tax contributions, though I'm not certain I see the point of making after-tax contributions since the gains will be taxed at ordinary income rates (not as capital gains) when distributed and you won't be able to make withdrawals without penalty until you reach "retirement age". You might as well just open a brokerage account and invest on your own. The one selling point for after-tax 401k contributions was that you could roll them over into a Roth IRA later, but that won't be an option any more if this proposal passes. Which is too bad for anyone who was counting on a Roth IRA conversion as part of their retirement strategy.