What is After Tax 401K? How is it different from Roth 401K? What is Mega backdoor Roth? How do we choose the funds for our 401K? Explained in Tamil with english subtitles. 00:00 Intro 00:30 After Tax 401K Vs Roth 401K 01:23 After Tax 401K Vs Brokerage 02:51 Mega Backdoor Roth 04:24 Other 401K Notes 04:47 Required Minimum Distribution 05:28 401K Inheritance 06:12 401K Fund Selection 07:57 Self Directed Brokerage References: Related Episodes: 401K Explained: Roth 401K Vs Pretax 401K: IRA/Roth IRA: Tax Saving Priorities in USA: USA College Savings plan - 529: USA College expenses: LinkedIn: Twitter: Web: #VijayMohan #InvestmentInsights #AfterTax401K #401KFundSelection #MegaBackdoorRoth DISCLAIMER: The content of this video is my own opinions and is for information purposes only. It is not intended as a substitute for professional financial advice. It is only intended to provide education about investments....(read more)
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After Tax 401K, Mega Backdoor Roth & Fund Selection in Tamil (US Retirement Series - 3) retirement planning is an essential component of financial stability, and understanding the various retirement options available to us is crucial. In this article, we will delve into the concept of After Tax 401K, Mega Backdoor Roth, and Fund Selection, focusing on how these options can be utilized to maximize our savings and potential growth during retirement. The After Tax 401K is an additional contribution option available to employees who have already reached the maximum contribution limit of their traditional 401K. It allows individuals to contribute additional funds to their retirement account on an after-tax basis, meaning the contributions are made with money that has already been taxed. While contributions to the After Tax 401K are made on an after-tax basis, the growth and earnings on these contributions are tax-deferred until withdrawal. This means that any investment gains and returns made within the account are not taxed until they are withdrawn during retirement. It provides an opportunity for individuals to accumulate additional tax-deferred savings for their retirement. One of the main advantages of the After Tax 401K is its potential for conversion into a Roth IRA through a process called Mega Backdoor Roth. A Backdoor Roth IRA is a strategy used by high-income earners to contribute to a Roth IRA when their income exceeds the limits for direct contributions. The Mega Backdoor Roth takes this strategy one step further. To perform a Mega Backdoor Roth conversion, individuals need to transfer the after-tax contributions made in their After Tax 401K to a Roth IRA. This conversion is possible because the After Tax 401K allows for in-service distributions, meaning individuals can move funds out of the retirement account while still employed. By converting the after-tax contributions to a Roth IRA, individuals unlock the potential for tax-free growth and tax-free withdrawals during retirement. Fund selection is another important aspect to consider when planning for retirement. Different retirement accounts offer various investment options, including mutual funds, index funds, and target-date funds. It is crucial to understand each fund's investment strategy, historical performance, and associated fees before making a decision. Mutual funds are actively managed funds that aim to outperform the market by carefully selecting and managing a portfolio of stocks and bonds. Index funds, on the other hand, aim to replicate the performance of a specific market index, such as the S&P 500. These funds typically have lower fees and are passively managed, making them an attractive option for long-term investors. Target-date funds are a type of mutual fund that automatically adjusts its asset allocation based on the investor's target retirement date. As the investor approaches retirement, the fund gradually shifts towards more conservative investments, reducing the risk as the time horizon shortens. When selecting funds for your retirement account, it is essential to understand your risk tolerance, investment goals, and time horizon. Diversification is also a crucial aspect to consider, as it allows for spreading investments across different asset classes to reduce risk. In conclusion, the After Tax 401K, Mega Backdoor Roth, and fund selection are important considerations when planning for retirement. The After Tax 401K allows for additional after-tax contributions, while the Mega Backdoor Roth provides a strategy to convert these contributions into a Roth IRA. Proper fund selection ensures that investments align with your financial goals and risk tolerance. By understanding these options and making informed decisions, individuals can effectively maximize their retirement savings and potential growth. https://inflationprotection.org/%e0%ae%9f%e0%af%88%e0%ae%9f%e0%ae%bf%e0%ae%b2%e0%af%8d-%e0%ae%87%e0%ae%a9%e0%ae%bf-%e0%ae%b5%e0%ae%b0%e0%ae%bf-401k-%e0%ae%ae%e0%af%86%e0%ae%95%e0%ae%be-%e0%ae%aa%e0%af%87%e0%ae%95%e0%af%8d-%e0%ae%b0/?feed_id=115655&_unique_id=64aab9e577ad4 #Inflation #Retirement #GoldIRA #Wealth #Investing #401k #401KFundselection #401KInheritance #aftertax401k #Finance #FinanceLiteracy #financialknowledge #howtoinvest #InvestmentIdeas #investmentinsights #investmenttips #Investments #ira #MegaBackdoorRoth #MutualFunds #Retirement #RMD #ROTH401k #Tamil #USRetirementSavings #USA #VijayMohan #BackdoorRothIRA #401k #401KFundselection #401KInheritance #aftertax401k #Finance #FinanceLiteracy #financialknowledge #howtoinvest #InvestmentIdeas #investmentinsights #investmenttips #Investments #ira #MegaBackdoorRoth #MutualFunds #Retirement #RMD #ROTH401k #Tamil #USRetirementSavings #USA #VijayMohan
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