Can: Contribute On An After-Tax Basis
Though not all plans allow this, the IRS allows for after-tax contributions to a plan. This means that when you take out that portion of your 401(k) in retirement, your total distribution will be tax-free, not just your what you’ve earned.
Generally, this type of plan is known as a Roth 401(k). Contribution limits on after-tax 401(k) contributions are the same as the limits with pretax contributions. Still, both types of subsidies must be added together to determine whether you remain within your limits.
