Post-tax contributions are funds that are deposited into a retirement account after income taxes have been paid on them.
Unlike pre-tax contributions, which are made with pre-tax income and reduce your taxable income for the year, post-tax contributions are made with income that has already been taxed. These contributions are typically made to Roth retirement accounts, such as a Roth IRA or Roth 401(k).
The advantage of making post-tax contributions is that qualified withdrawals from Roth accounts are tax-free in retirement. This means that the investment growth and earnings on those contributions can be withdrawn without incurring additional taxes, provided certain conditions are met. While post-tax contributions do not provide an immediate tax benefit like pre-tax contributions, they can offer tax advantages in the future when you withdraw the funds in retirement.