Money in after-tax accounts can grow tax-deferred, which is a nice perk, but some plans offer something even better: “in plan” conversions that let you quickly move the money into Roth accounts, minimizing the potential tax bill. This combination of after-tax contributions followed by conversions is known as a “mega backdoor Roth,” and it can be mega-helpful in piling up future tax-free funds.
The article How to Spot a Great 401(k) was written by NerdWallet and originally published by The Associated Press on October 13, 2022.
LIZ WESTON is a writer at NerdWallet.
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