Contribute pretax or after tax 401k?

do you want to lower state and federal income tax? put as much as you can in a pre tax. You will still pay SS/medicare regardless based on gross income.

PRE TAX at least to employer match.

this is not rocket science.

most will tell you max the 401k then if anything left throw it in ROTH IRA/401k.

if you have more $$$ left over use it for trading/RE/lending or whatever other investments you like.

I was talking about after tax bucket. I do see a Roth 401k option but I have never put anything in that option before. I usually rotate between the pretax and after tax options.

Unless you need the money, you should never contribute to the after-tax over pre-tax and Roth.

If you’re lucky enough to max out the pre-tax and Roth portion, then you should contribute to the after-tax portion. For someone under 50, you can contribute $72,000 into a 401k in 2026.

If you’re contributing to the after-tax you should look into a conversion within the plan.

Also, when you change jobs or retire, whatever you contributed to the after-tax already can be rolled into a Roth IRA. However the earnings on those contributions must go to a Traditional IRA.

Don't forget Pre tax HSA if your health ins qualifies.

I'll try next enrollment period.

MFJ 32200
Max 401 for both 49000
HSA max 8750

Maybe that will get your MAGI to 98K.

I've never heard of after tax contributions before maxing standard 401k contribution limits (traditional and/or Roth.)

Only reason I know of to make true after tax.contributions (in excess of 401(k) deferral limit, which is $24,500 + catch up if 50+) is to do a mega backdoor Roth. That works if you're employer allows both after tax contributions (above the deferral limit) and in service withdrawals.

Traditional gives you more options to reduce your tax burden and things like roth ladder conversions are very good options to have. I'd vote (and I use) for traditional. Roth isn't the greatest thing ever like a lot of finance people suggest it is.

Roth is the greatest thing ever for lower income people and kids.

There is no one size fits all answer to this question, and it isn't only about math.

The Roth options give you flexibility. The traditional probably lets you save more money if you use it right. You need some of both.

I think a basic strategy is to try to reach retirement age with enough traditional assets, which, when combined with Social Security, would keep you in the lower tax brackets when you retire.

In my state, your marginal tax rate would be 27% state and fed. So for the same bring home check, you could invest $1 in Roth or $1.36+ in Trad. If some of your withdrawals will be in a lower bracket in the future, the math favors Trad. If it will be the same, it's a wash. If it's higher, Roth. But that is just math, and the tax rates will probably change, but aren't likely to change much in the lower brackets unless you keep voting for Socialists.

However, there is a tremendous amount of flexibility with a Roth that can really be useful if you plan ahead. I really didn't, but got lucky in this regards, but as an example, if you wanted a big emergency fund you could convert some of your Trad IRA to Roth IRA and in five years withdraw it for any reason at any age and not owe any taxes. You could do this for a lot of things: weddings, college, etc., and should be doing a little each year in case life throws you a curve ball.

I am 60 and concentrating on Roth 401K even though that math above probably favors Trad, but I want more flexibility

Agree and many aren’t aware of all of the different contribution choices.

Too many variable for a.one size fits all answer for Roth vs Traditional.

Rough rule of thumb I'd use:
12% bracket or below = Roth
32% bracket and up = Traditional
22-24% = grey area it depends

For instance, looking back I probably should have gone ahead and funded Roth in my peak earning years instead of switching to traditional. Now, because I have a pension, part time work, dividends and interest income, I can only convert a very small bit to Roth annually before it pits me in 22% bracket anyway. The conversion income will also bump my dividends into the 15% LTCG rate instead of zero. I could have contributed to Roth 401k and paid same 22-24% back when I was already stuck paying LTCG on dividends from taxable brokerage.

Now, I'm worried if I dont accelerate Roth conversions I will eventually get hit with widow penalty and IRMAA. Yet, I have insufficient space.in the 12% bracket to get Traditional balance down sufficiently. Also, to fund the tax on conversions I will need to sell assets from taxable brokerage but must nlw time that right to do so in a non conversion year to avoid the uneccessary 15% LTCG.

Bottom line: Don't sleep on Roth 401k even if potentially in lower bracket in conversion years. If the entire conversion cant be done in much lower bracket you may not be better off.

Yeah, I missed the part where he is skipping Roth and doing after tax in a 401K.

It would seem like the only situation it would make sense to do after tax instead or Roth or deferred would be if you had maxed out your deferred.