By Investment U Research Team When contributing to your retirement accounts, you’ll need to decide if your contribution goes in before or after taxes. Many advisors will tell you to go the after-tax route. What is an after-tax contribution and why does it matter? It simply means the government taxes your income the year it’s contributed, instead of when it’s withdrawn. This is important for one simple reason: pre-paying your taxes on retirement funds allows them to compound without the prospect of heavier income taxes in the future.
You probably know after-tax contribution accounts by a different name: Roth accounts. Roth IRAs and Roth contributions …read more
