IMovedYourCheese shares her journey on Reddit as a higher earner maximizing her 401(k) while recently learning about alternative retirement strategies like the backdoor Roth and mega backdoor Roth. Although maxing out a 401(k) is effective for reducing taxable income and building savings, it has limitations especially for high earners due to contribution caps. Exploring after-tax contributions can provide additional benefits, particularly when rolled over into a Roth IRA, enabling tax-free growth and potentially addressing the retirement savings gap for individuals like Cheese.
One of the most common (and effective) ways of saving for retirement... But that doesn't mean it's always best. (We've covered three risks in maximizing your 401(k).)
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