I’ve only had one employer that allowed after tax contributions (which for other people reading this is not the same as Roth 401K).
The issue is that most companies don’t allow it because of compliance reasons and rules regarding highly compensated employees. Of course the one company that did allow it was BigTech.
Not that I’m missing much. I doubt I will be in a higher tax bracket at retirement than I am now and I live in a state tax free state.
To me the primary benefit is when it comes to RMDs. Having a mix of traditional and Roth allows me to draw down the traditional in lower tax years to avoid RMD and have the Roth to fill in those later years or pass on to children. Plus, if you’ve maxed the $23,500ish of the traditional 401k and still have extra to save, it’s more tax advantaged in a Roth vs a taxable brokerage account.
These are obviously champagne problems but if you’re a high earning W2 it’s worth considering.
I think I should be able to do that post retirement by optimizing withdrawals with balancing tax brackets the first few years of retirement. I will have to put catch up contributions
in a Roth 401K anyway starting next year (new tax law).
The issue is that most companies don’t allow it because of compliance reasons and rules regarding highly compensated employees. Of course the one company that did allow it was BigTech.
Not that I’m missing much. I doubt I will be in a higher tax bracket at retirement than I am now and I live in a state tax free state.