What are the differences between a Roth 401k and after-tax contributions, and which option would be more beneficial for my retirement savings?

Answer 1

The main difference between a Roth 401(k) and after-tax contributions is how they are taxed. Roth 401(k) contributions are taxed upfront, while after-tax contributions are taxed when you withdraw the money.

The option that would be more beneficial for your retirement savings depends on your individual financial situation and goals. If you expect to be in a higher tax bracket in retirement, a Roth 401(k) may be more advantageous as you would pay taxes upfront at a lower rate. However, if you anticipate being in a lower tax bracket in retirement, after-tax contributions may be more beneficial as you would pay taxes at a lower rate when you withdraw the money. It's important to consider your current tax situation, future tax expectations, and overall retirement strategy when deciding between the two options.