PLANADVISER - July/August 2022 - 28

plan design / after-tax contributions
A Different Way to Save
F
The ins and outs of adding a non-Roth option to a 401(k)
rancis Investment Counsel LLC has several employer
clients that allow after-tax, non-Roth contributions
to their 401(k) plan. " For those employers, the appeal
is mainly the ability for highly compensated individuals
to put more money away for their retirement, " says Kelli
Send, a principal and senior vice president at the Brookfield,
Wisconsin, advisory firm. " Combined with the ability to do
an in-plan conversion to a Roth feature immediately, it's an
attractive idea for people who want to save more money in
their Roth and the Roth contribution limits don't let them
save as much as they'd like. "
The after-tax, non-Roth savings feature potentially also
could be a way for a broad spectrum of employees to put
aside money for emergency savings, Send says. " Both of these
types of approaches can be a great benefit for participants. "
Why It Works
Twenty-one percent of plans included in Vanguard's " How
America Saves 2022 " report made after-tax employee-elective
deferrals available to participants in 2021. The after-tax option
is more likely to be offered by large plans. One-third of participants
had access to the feature, and 10% who were offered it
took advantage of it, the report says, noting that those participants
tended to have higher incomes and longer tenures.
An after-tax savings feature potentially can allow participants
to contribute much more to their retirement savings,
says Christine Benz, director of personal finance at Morningstar
Inc. in Chicago. A participant may contribute a total of
$20,500 annually, or $27,000 if over age 50, to a 401(k) account.
But if someone's plan allows after-tax contributions, there
is no specific IRS limit on the amount. Instead, the overall
415(c) annual total contribution limit-including a participant's
pre-tax, Roth and after-tax contributions, as well as
the employer's contribution-comes into play, Benz says.
The 415(c) limit allows total contributions for an individual
of up to $61,000, or $67,500 for people 50 and up,
this year. So in a plan permitting after-tax contributions,
a participant under age 50 who contributes $20,500 and
receives $10,250 in an employer match could then save
another $30,250-assuming there are no plan-testing
complications-in after-tax contributions before reaching
the $61,000 limit, she says.
28 | planadviser.com July-August 2022
Art by Ryan Peltier
http://www.planadviser.com

PLANADVISER - July/August 2022

Table of Contents for the Digital Edition of PLANADVISER - July/August 2022

Balancing Act
Greater Access
Previewing Plan Features
A Different Way to Save
Next-Level Options
New Territory for Income?
Compliance for Wealth Managers
If Caught Off Guard by A Failure
Larry E. Crocker
PLANADVISER - July/August 2022 - C1
PLANADVISER - July/August 2022 - FC1
PLANADVISER - July/August 2022 - FC2
PLANADVISER - July/August 2022 - C2
PLANADVISER - July/August 2022 - 1
PLANADVISER - July/August 2022 - 2
PLANADVISER - July/August 2022 - 3
PLANADVISER - July/August 2022 - 4
PLANADVISER - July/August 2022 - 5
PLANADVISER - July/August 2022 - 6
PLANADVISER - July/August 2022 - 7
PLANADVISER - July/August 2022 - 8
PLANADVISER - July/August 2022 - 9
PLANADVISER - July/August 2022 - 10
PLANADVISER - July/August 2022 - 11
PLANADVISER - July/August 2022 - 12
PLANADVISER - July/August 2022 - 13
PLANADVISER - July/August 2022 - 14
PLANADVISER - July/August 2022 - 15
PLANADVISER - July/August 2022 - Balancing Act
PLANADVISER - July/August 2022 - 17
PLANADVISER - July/August 2022 - 18
PLANADVISER - July/August 2022 - 19
PLANADVISER - July/August 2022 - Greater Access
PLANADVISER - July/August 2022 - 21
PLANADVISER - July/August 2022 - 22
PLANADVISER - July/August 2022 - 23
PLANADVISER - July/August 2022 - Previewing Plan Features
PLANADVISER - July/August 2022 - 25
PLANADVISER - July/August 2022 - 26
PLANADVISER - July/August 2022 - 27
PLANADVISER - July/August 2022 - A Different Way to Save
PLANADVISER - July/August 2022 - 29
PLANADVISER - July/August 2022 - 30
PLANADVISER - July/August 2022 - 31
PLANADVISER - July/August 2022 - Next-Level Options
PLANADVISER - July/August 2022 - 33
PLANADVISER - July/August 2022 - 34
PLANADVISER - July/August 2022 - 35
PLANADVISER - July/August 2022 - New Territory for Income?
PLANADVISER - July/August 2022 - 37
PLANADVISER - July/August 2022 - Compliance for Wealth Managers
PLANADVISER - July/August 2022 - If Caught Off Guard by A Failure
PLANADVISER - July/August 2022 - Larry E. Crocker
PLANADVISER - July/August 2022 - Cover3
PLANADVISER - July/August 2022 - Cover4
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https://www.planadviserdigital.com/planadviser/industry_leader_awards_2022
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https://www.planadviserdigital.com/planadviser/november_december_2021
https://www.planadviserdigital.com/planadviser/september_october_2021
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https://www.planadviserdigital.com/planadviser/november_december_2020
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https://www.planadviserdigital.com/planadviser/july_august_2020
https://www.planadviserdigital.com/planadviser/may_june_2020
https://www.planadviserdigital.com/planadviser/march_april_2020
https://www.planadviserdigital.com/planadviser/january_february_2020
https://www.planadviserdigital.com/planadviser/november_december_2019
https://www.planadviserdigital.com/planadviser/september_october_2019
https://www.planadviserdigital.com/planadviser/july_august_2019
https://www.planadviserdigital.com/planadviser/may_june_2019
https://www.planadviserdigital.com/planadviser/march_april_2019
https://www.planadviserdigital.com/planadviser/january_february_2019
https://www.planadviserdigital.com/planadviser/november_december_2018
https://www.planadviserdigital.com/planadviser/september_october_2018
https://www.planadviserdigital.com/planadviser/july_august_2018
https://www.planadviserdigital.com/planadviser/may_june_2018
https://www.planadviserdigital.com/planadviser/march_april_2018
https://www.planadviserdigital.com/planadviser/january_february_2018
https://www.planadviserdigital.com/planadviser/november_december_2017
https://www.planadviserdigital.com/planadviser/september_october_2017
https://www.planadviserdigital.com/planadviser/july_august_2017
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