It was driving me nuts because I couldn't find anything.
I finally found that this is something offered by mega corporations (my other theory since those are a whole other animal), mostly as an investment tool. There is no mention of this specifically in the 401(k) tax code. The "benefit" is to invest after tax in the "Same place as your pre-tax 401k" (you can invest over the $16,500 limit - it really has nothing to do with 401k rules) and the benefit is that Corporations offer funds at low cost that you couldn't invest otherwise, or couldn't get at a discount otherwise.
The tax treatment is virtually identical to non-deductible IRAs.
You would only do this after all your tax-deductible options were maxed out. So you could max out your pre-tax 401k and THEN fund an after tax 401k (this is the piece I Was missing before).
So they say - it's all greek to me. But, it's interesting.
Last edited by MonkeyMama : 02-09-2010 at 02:51 PM.
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