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I'm 33 years old, currently maxing out pretax contributions to 401(k), and fully funding my Roth IRA. It seems like the next place I put money should be either after-tax contributions to 401(k) or a regular brokerage account. As I understand the options:

1) Growth of 401(k) contributions would be tax-deferred, but eventually taxable as regular income.

2) I lose the tax-deferred advantage if I go with a brokerage account, but when I do pay taxes, it's at the lower capital gains rate. Moreover, if I stick to LTBH, I effectively defer taxes anyway. (Well, I defer captital gains. I suppose I still pay taxes on any dividends.)

Also, the rep from my 401(k) company told me that if I leave my current employer before retirement (seems likely at my age!), the after tax money (contributions and gains?) can't be rolled over to an IRA or a new 401(k). Instead, the gains on the after tax money will be taxed and I'll get a check for the value of the after-tax account minus the withheld taxes. Does this sound right?

I'm happy with my 401(k) investment choices, and I like the ease of automatic paycheck deductions. But based on the full picture, it seems like the brokerage account is the way to go. Does it sound like I'm on the right track? When would someone want to make after-tax contributions to their 401(k)?

Thanks for your thoughts,
Parkway
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