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Thread: 41k before or after taxes?

  1. #1

    41k before or after taxes?

    I was reviewing my 401k stuff. I wonder what is best. For my contributions to be after or before taxes?

    Thanks

  2. #2

    Re:41k before or after taxes?

    Before taxes, that way you get tax on the remaining money.

    http://www.401k.com/401k/pfp/rp/taxes.htm

  3. #3

    Re:41k before or after taxes?

    so why would someone do it any other way?

  4. #4

    Re:41k before or after taxes?

    It may depend on your job's plan setup. It may let you add so much into before taxes and the rest in after taxes.

    Read your plan's docs carefully.

  5. #5
    Mentor coltrane's Avatar
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    Re:41k before or after taxes?

    Before

  6. #6

    Re:41k before or after taxes?

    When your money goes in before taxes, that means when you withdraw it, you are taxed on the principal and the earnings.

    If you put the money in after tax, then when you withdraw it you are only taxed on the earnings, since you've been taxed already on the principal.

  7. #7
    Mentor coltrane's Avatar
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    Re:41k before or after taxes?

    Thats the idea, dont withdraw it
    I hear there are ways around that, Id have to do more research on that though

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