via Wall Street Journal
I have read recent articles on making after-tax contributions to a 401(k) plan and later rolling them into a Roth IRA. I work for a company that offers the standard pretax 401(k) and the after-tax Roth 401(k). How do I go about putting after-tax money [into my standard 401(k)] so that, say, 10 years from now, when I leave the company, I can roll all my after-tax money into my Roth at a securities firm?
The strategy you are asking about is an appealing one to people who are already setting aside the maximum salary deferral into a traditional 401(k) or a Roth 401(k), or a combination of the two: If their plan allows, they can put additional dollars into the traditional 401(k) on an after-tax basis and then roll that to a Roth IRA when they leave the company—a move that was simplified by the Internal Revenue Service in a ruling last year.
The first step is to figure out if your traditional 401(k) plan accepts after-tax contributions. One place to look is the “summary plan description,” available from your employer or, perhaps, on the website for your company’s 401(k) plan…
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