After-tax contribution

After-Tax Contribution

A contribution made to a retirement plan with money one has left over after paying taxes. That is, when one makes after-tax contributions to a retirement plan, one has already paid taxes on the contribution. As a result, one does not pay taxes on the withdrawals on the plan made after retirement. After tax contributions are made on Roth IRAs and Roth 401(k)s. See also: Pre-Tax Contributions.

After-tax contribution.

An after-tax contribution is money you put into your 401(k) or other employer sponsored retirement savings plan either instead of or in addition to your pretax contribution.

You make an after-tax contribution if you've chosen to participate in a Roth 401(k) or similar tax-free plan rather than a traditional tax-deferred 401(k).

However, if you make excess deferrals, any earnings on the after-tax amount accumulate tax deferred. The disadvantage is that figuring the tax that's due on your required distributions may be more complicated than if you had made only pretax contributions.

References in periodicals archive ?
The Roth 401(k) feature, an after-tax contribution option that became available in 2006, had been adopted by 24% of the Vanguard plans and 6% of their participants by the end of 2007.
The increase was primarily due to the previously mentioned $700 million after-tax gain from the Company's settlement agreement with Visa, offset in part by the $46 million after-tax litigation-related costs associated with the lawsuit against Visa and the $31 million after-tax contribution to the American Express Charitable Fund.
5 million after-tax contribution to Safeco's newly created Safeco Insurance Foundation, and after-tax net realized investment gains of $25.
04 per diluted share after-tax contribution to The Tiffany & Co.
The after-tax contribution to Windstream's cash flow by the directory business is somewhat less and the effect of its loss on free cash flow will be mitigated by lower interest expense as well as a reduced dividend requirement.
Earnings for first quarter 1999 included an after-tax contribution of $3.
The after-tax contribution to total net earnings from Equitable's insurance and annuity operations totaled $68.
9 million after-tax contribution to 1992 earnings resulting from the SFAS No.
Net earnings in the third quarter of 2000 include an after-tax contribution of $8.
0 million after-tax contribution for the third quarter of 1992.
5 million after-tax contribution to earnings during the first quarter of 1992 resulting from the SFAS No.