Can anyone help me out with the following?If I exceed the annual $10,500 limit in my 401k contributions (say $11,000) I understand I will pay income tax on the $500 in excess. But does anyone know if that $500 will still grow tax free, like the rest of the 401k? If so, shouldn't we be encouraged to contribute any additional monies we have to 401k rather than stick it into a separate long term growth account that has no tax advantages? While you still have to pay taxes on the income, at least the investment grows tax free.Thanks for any help.
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