Hyrule's Hidden Riches: Unlocking the Secrets of the After-Tax 401(k)!

A Secret Passage to Retirement Gold!

Hylians listen up! Princess Zelda here and I've stumbled upon a secret that could make even Ganon jealous – a way to seriously boost your retirement savings! Apparently there's this thing called an after tax 401(k) a feature so hidden it's like a secret passage in Hyrule Castle. For 2025 you can stash away up to $23,500 in your 401(k). And if you're shall we say 'seasoned' like a fine Lon Lon Ranch milk (50 and older) you get an extra $7,500. And for those between 60 and 63? A whopping $11,250! Some plans even let you add after tax contributions on top of all that! By the Goddess Hylia that's a lot of rupees! The max limit for 2025 is $70,000!

Believe it or Not: Tax Free Income is Real!

Dan Galli a financial planner (basically a real life Guru Guru but with money instead of a weird music box) says if you can swing it it's "an amazing outcome." Apparently some people don't even believe it's real! I can relate; sometimes I don't believe Link's cooking is real either. But here's the catch (and it's a big one like a Dodongo): not all plans offer this magical feature. In 2023 only 22% of employer plans did. So it's rarer than a silent princess.

The Roth vs. After Tax Rumble!

Now here's where it gets a bit like figuring out the Water Temple: after tax contributions grow tax deferred. Roth contributions grow tax free! So it's like choosing between a regular arrow and a Light Arrow. The Light Arrow (Roth) is the way to go! That's why you need to convert those after tax funds to Roth regularly. Otherwise you'll be paying taxes on your gains when you withdraw. And nobody wants to give Ganon more power... I mean pay more taxes!

Converting to Roth: Not as Easy as Cooking a Dubious Food!

The conversion process is and I quote "unique to each plan." Some plans are as slow as a cucco trying to fly only letting you convert monthly or quarterly. The best plans? They do it automatically! Like magic! But if you don't act the longer you leave those after tax dollars in there the more tax liability there will be!

First Catch the Fairy (Employer Match)!

Before you go wild with after tax contributions make sure you're maxing out your regular 401(k) to snag that employer match. It's like Link making sure he gets all the heart containers before facing the final boss. After that if you've got the rupees to spare you can "start filling up the after tax bucket." Think of it as upgrading your armor!

Don't Be a Sluggardly Bokoblin! Maximize Your Savings!

In 2023 only 14% of employees maxed out their 401(k). And for those with catch up contributions? Only 15% participated! Don't be like those lazy Bokoblins who just sit around the campfire all day! Take control of your financial destiny and unlock the power of the after tax 401(k). It's dangerous to go alone; take this knowledge with you!