Reported 4 months ago
Contributing after-tax dollars to a 401(k) allows for tax-free withdrawals in retirement, and rolling over these funds to a Roth IRA is possible by following IRS rules. After-tax 401(k) contributions are distinguished from other types, such as elective salary deferrals and designated Roth contributions, affecting how funds are rolled over. A Roth IRA, funded with after-tax dollars, offers tax-free qualified withdrawals and may be beneficial for those expecting to be in a higher tax bracket during retirement. When completing a rollover, individuals can choose to move the entire amount or a partial amount, bearing in mind the implications for pre-tax contributions and earnings. It's optional to roll over 401(k) money to a Roth IRA, with alternatives including rolling into a traditional IRA, leaving the funds in the current plan, or withdrawing them.
Source: YAHOO