After Tax 401K for Overseas tax free job

seanonu · #1 Oct 12, 2009, 04:08 AM

I am working overseas in a job that allows me to earn tax-free salary up to $89K. My company offers a pre-tax 401K and an after-tax 401k. The max I can add to my 401K is $49K per year, minus $16K if I do a pre-tax contribution. Since the $16K is tax-deferred in the pre-tax contributions, and all after tax contributions are tax-free at the time of withdrawal, what is the benefit for or against putting all my 401K into after-tax. The company matches either way.

I know that if I earn $120K then I should put some in my pre-tax to reduce my taxable income, but if I earn less than that, is there a benefit one way or another?



At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to: Get free answers from experts in any of our 300+ topics. Accept money for answers that you provide. Communicate privately with other members (PM). See fewer ads. Sign Up!