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While experts are forecasting more homes will be available, they said the boost in supply is not enough to solve affordability issues for buyers.
Interest rates are expected to come down, but not by enough to counteract high prices.
“It’s a very strange market, and it’s kind of hard to predict,” said Jeff Ostrowski, a housing analyst at Bankrate.com.

Experts are torn about where exactly the housing market is headed in the latter half of the year.
“Mostly, we think the housing market is going to improve over the next half of the year,” Glenn Kelman, chief executive of Redfin, a real estate brokerage site, said on a May 22 appearance on CNBC’s “Money Movers.”

“We’ve hit rock bottom in the first quarter of 2024 and I would expect the housing market to do a little bit better,” Kelman said.
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Other experts are less sure about the market’s prospects for improvement.
“It’s a very strange market, and it’s kind of hard to predict,” said Jeff Ostrowski, a housing analyst at Bankrate.com.
Here are some of what Ostrowski, Kelman and other real estate experts say could shape the real estate market in the second half of 2024:

More homes are coming on the market

Simonskafar | E+ | Getty Images

The mortgage rate lock-in effect seems to be wearing off, said Orphe Divounguy, senior economist at Zillow.
The mortgage rate lock-in effect, or the golden handcuff effect, kept any homeowners with extremely low mortgage rates from listing their homes last year as they didn’t want to finance a new home at a much higher interest rate. 
During the week ending June 1, newly listed homes grew 2.1% from a year ago, according to a weekly housing trends report by Realtor.com. In the same period, available inventory of homes for sale grew 35.5% compared with last year, Realtor.com found.
In his CNBC appearance, Kelman also pointed out that demand for homeownership remains high, especially among buyers who have been putting off the home purchase for a long time.
While the market is seeing more listings, the boost in supply is not enough to attract buyers, according to Doug Duncan, senior vice president and chief economist at Fannie Mae.
“Listings have trended generally upward of late, suggesting to us that a rising number of current homeowners can no longer put off moving,” said Duncan in a release earlier this month. “However, we believe the ongoing affordability challenges are likely to weigh on how quickly these new listings convert to actual sales.”

‘Some movement’ on interest rates

The 30-year fixed rate mortgage slid 6.99% on June 6 after climbing 7.22% on May 20, according to Freddie Mac data via the Federal Reserve.
“Mortgage rates are down a bit from May highs, but that hasn’t spurred a surge of competition among buyers in the housing market,” Divounguy said.
Affordability remains a top priority for buyers and rates stayed above 7% for long.

Many experts believe the Federal Reserve will likely hold interest rates in the upcoming board meeting on June 12. However, the National Association of Realtors forecast a potential interest rate cut by the fall of this year, according to Jessica Lautz, the NAR’s deputy chief economist.
By late September, “perhaps we will start seeing movement on the Fed funds rate,” she said. “That’s at least what our hope is.”
While mortgage rates are forecasted to come down to 6.5% in the fourth quarter, homebuyers may not see much relief given rising home prices amid limited housing inventory, noted Lautz.
“It’s very possible that they’re ending up paying the same mortgage payment because they’re purchasing a home that while has a lower interest rate, has a higher price point,” she said.

‘It’s hard to foresee prices really cooling’

While the housing market has slowed in terms of the number of transactions, prices haven’t soften despite broader expectations, Ostrowski explained.
The median home sale price across the U.S. increased to $392,200, a 4.4% jump from a year earlier, according to Redfin.
“It’s hard to foresee prices really cooling or declining nationally,” said Ostrowski. “It seems likely we’re going to see another record high for home prices this summer.”

Some metropolitan areas in the U.S. have seen prices soften. Home-sale prices declined 2.9% in Austin and 1.2% in San Antonio and Fort Worth, Texas, according to Redfin data. Home prices cooled 0.9% in Portland, Oregon, the firm noted.
However, many of these areas saw major price growth during the Covid-19 pandemic, with prices jumping as much as 45%, said Lautz. Buyers might not see much relief in affordability despite recent price declines given those pandemic-era runups.
About 90% of metro markets posted home price gains in 2024, according to NAR data. While price points may be softening in some local markets, the “vast majority of markets are seeing home price growth,” said Lautz. More

Even as an estimated $84 trillion is poised to transfer from older to younger generations, many Americans worry they won’t achieve financial security in their elder years.
Wealth inequality has led to discussion of both a great wealth transfer and a retirement savings crisis.

Ascentxmedia | E+ | Getty Images

It can feel like the U.S. economy has divided consumers into groups of haves and have nots — and retirees are no exception.
Research has found a great wealth transfer is underway, with research and consulting firm Cerulli Associates estimating an $84 trillion to shift from older to younger generations through 2045. Yet other experts say a retirement savings crisis may be brewing for some who have not set aside enough for their elder years.

Both dynamics are at work, according to Chayce Horton, senior analyst at Cerulli.
“That wealth transfer is going to take place on a less-than-widespread basis,” Horton said.
“There’s been a significant amount of wealth that’s been created, and that wealth is concentrated in fewer and older hands than it has been in a long time,” he said.

Who stands to benefit from the great wealth transfer

Who may struggle in retirement

Covering the cost of retirement has gone up, as inflation has made health and long-term care in retirement more expensive. A 65-year-old single individual may need to have about $157,700 to pay for health-care costs in retirement, Fidelity estimated in 2023. An average 65-year-old retired couple would need about $315,000.
“Those costs have grown substantially to the point where a lot of people are going to die with nothing to pass on,” Horton said.
Those costs — combined with low retirement balances — have prompted some to say there is a retirement savings crisis underway.
A majority of Americans — 79% — said there is a retirement crisis, up from 67% in 2020, a recent survey from the National Institute on Retirement Security found. More than half (55%) said they are concerned they will not have financial security in retirement.

The average overall 401(k) balance was $125,900 in the first quarter, according to Fidelity Investments, with a record total savings rate of 14.2% including employee and employer contributions.
Yet those numbers do not include the roughly half of Americans who do not have access to workplace retirement savings accounts.
To force everyone to save, mandatory savings plans that require participation from all individuals may be the answer, Teresa Ghilarducci, professor of economics at The New School for Social Research, said in a Thursday interview on CNBC’s “Squawk Box.”
“We know that the most important financial power in our markets is the power of compound interest,” said Ghilarducci, author of the book, “Work, Retire, Repeat: The Uncertainty of Retirement in the New Economy.”
“Getting people in early into a pension plan is the only way they can have enough savings at the end of their working lives to supplement their Social Security,” she said.
Data shows a forced savings approach works, said Ed Murphy, president and CEO of financial services provider Empower. For those who earn $35,000 to $50,000 who do not have a workplace retirement savings plan, they’re likely not saving anything.
Once members of that cohort have access to workplace savings through a payroll deduction, up to 90% will save, he explained.
“We’ve got to get more people saving through the workplace,” Murphy said. ” It’s just the most effective means to get people to save.”

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A shopper carries Burlington bags in New York, US, on Monday, Nov. 20, 2023. Burlington Stores Inc. is scheduled to release earnings figures on November 21.
Stephanie Keith | Bloomberg | Getty Images

The debate around when the Federal Reserve will start to lower interest rates continues to influence market sentiment. Investors are interpreting important macroeconomic data, including jobs market reports, to decipher the current state of the U.S. economy.  
At the same time, Wall Street analysts continue to focus on picking individual stocks that can thrive even in the face of short-term pressures and deliver attractive, long-term returns.

Here are three stocks favored by the Street’s top pros, according to TipRanks, a platform that ranks analysts based on their past performance.
Burlington Stores
Off-price retailer Burlington Stores (BURL) is this week’s first pick. The company impressed investors with its upbeat results for the first quarter of fiscal 2024 (ended May 4) and raised its profit margin and earnings outlook for the full year.
In reaction to the Q1 results, Jefferies analyst Corey Tarlowe reaffirmed a buy rating on BURL and increased the price target to $275 from $260. The analyst is confident about the retailer’s ability to deliver robust comparable sales growth.
Tarlowe noted that the expansion in Burlington Stores’ gross and operating margins helped drive better-than-expected earnings in the first quarter. The analyst also highlighted the New Jersey-based company’s well-managed inventory levels.
“BURL is the smallest and least-profitable of the major off-price retailers, and we believe that it has a significant top-line and margin runway ahead that is not yet fully factored into estimates,” said Tarlowe.

Tarlowe expects BURL to gain from customers’ migration to off-price retailers from department stores, which were hit hard by the Covid pandemic. The retailer operated 1,021 stores as of the end of Q1 fiscal 2024 and plans to open about 100 new stores this year. The analyst expects BURL to expand its footprint to 2,000 stores over time. 
Tarlowe ranks No. 291 among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 67% of the time, with each delivering an average return of 18.9%. (See Burlington Stores Stock Charts on TipRanks) 
Amazon
E-commerce and cloud computing company Amazon (AMZN) is also a top pick. The company delivered solid first-quarter earnings despite a challenging macroeconomic backdrop. The company’s bottom line gained from strong revenue growth and cost-cutting measures.
Recently, Tigress Financial analyst Ivan Feinseth reiterated a buy rating on AMZN and increased his price target to $245 from $210, citing generative artificial intelligence-related tailwinds, multi-industry leadership position and impressive brand equity.
The analyst noted that businesses are increasingly adopting generative AI to boost operating efficiency and enhance competitiveness, driving profits at Amazon Web Services (AWS). He expects AWS to see a continued rise in the number of large language models (LLM) built on its platform, thanks to its “superior operating performance, security, and industry-leading capabilities.”
Feinseth highlighted Amazon’s other strengths, including continued efforts to expand Prime membership benefits, increase grocery sales, grow its digital advertising business and continue to innovate. Moreover, AMZN’s solid balance sheet and cash flows enable it to make investments in strategic deals and growth initiatives.
Feinseth ranks No. 242 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 60% of the time, with each delivering an average return of 12.2%. (See Amazon Technical Analysis on TipRanks) 
PagerDuty
Finally, there’s PagerDuty (PD), a digital operations management platform. The company reported mixed results in the first quarter of fiscal 2025 (ended April 30). Adjusted earnings per share topped analyst expectations, while revenue slightly missed estimates. The company highlighted that it was profitable on a non-GAAP basis for a seventh consecutive quarter.
Following the Q1 print, RBC Capital analyst Matthew Hedberg reiterated a buy rating on PagerDuty with a price target of $27, saying, “We feel slightly better about the potential for 2H/25 acceleration despite tough macros.”
The analyst highlighted the 10% growth in the company’s annual recurring revenue (ARR) and an 11% rise in billings. In particular, he noted that ARR growth was steady at 10% for the second consecutive quarter. Management projects ARR growth to accelerate in the second half of Fiscal 2025, given traction in multi-year deals.
Hedberg thinks that there is better pipeline visibility into the second half of fiscal 2025, backed by momentum in multi-product and multi-quarter deals. He is also encouraged by the opportunities that PagerDuty is seeing in its federal business. Notably, the company secured an Authority to Operate (ATO) from the Department of Veteran Affairs and closed its first seven-figure deal in the public sector.
Hedberg ranks No. 565 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 52% of the time, with each delivering an average return of 9.7%. (See PagerDuty Financial Statements on TipRanks)  More

The Tax Cuts and Jobs Act of 2017, or TCJA, temporarily reduced taxes for most Americans.
Many of those tax breaks will expire after 2025 without changes from Congress.
Former President Donald Trump wants to extend all TCJA provisions, while President Joe Biden aims to extend tax breaks for taxpayers under the $400,000 threshold, which is most Americans.
However, there are lingering questions about how to pay for TCJA extensions amid the federal budget deficit. 

Joe Biden and Donald Trump 2024.
Chip Somodevilla | Alex Wong | Getty Images

Trillions in expiring tax breaks are at stake this election season — and those sunsets could raise taxes for most Americans after 2025 without extensions from Congress.
The Tax Cuts and Jobs Act of 2017, or TCJA, temporarily reduced taxes for most Americans with lower federal income brackets, a higher standard deduction and a more generous child tax credit, among other provisions.  

It’s a key issue for presumptive nominees President Joe Biden and former President Donald Trump, who have both addressed the 2025 tax cliff.
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Trump wants to extend all TCJA provisions, and Biden aims to extend tax breaks for taxpayers whose income is under the $400,000 threshold, which is most Americans.  
“For 95% of taxpayers, they both want to do the same thing,” said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.

For 95% of taxpayers, they both want to do the same thing.

Howard Gleckman
Senior fellow at the Urban-Brookings Tax Policy Center

Of course, future legislative updates, if any, will depend on which party controls Congress.

Lower federal income tax brackets

One expiring TCJA provision is lower federal income tax brackets, which “reduced rates across the board,” said Garrett Watson, senior policy analyst and modeling manager at the Tax Foundation.
Without an extension, the individual rates will increase after 2025, returning to 10%, 15%, 25%, 28%, 33%, 35% and 39.6%.
Biden’s fiscal year 2025 budget called for the 39.6% rate to apply to single filers making more than $400,000 and married couples earning above $450,000 per year.

A related expiration is the higher standard deduction, which sharply reduced the percentage of filers who itemized.
The percentage of filers claiming the standard deduction jumped to 90% in 2020 from 70% in 2017 before the TCJA, according to the Tax Policy Center.
If the standard deduction reverted to pre-TCJA levels, more filers could claim itemized tax breaks for charitable gifts, medical expenses, state and local taxes and more.   

More generous child tax credit

Another expiring TCJA provision is the bigger child tax credit, which some lawmakers have fought to expand in 2024. The TCJA doubled the maximum child tax credit to $2,000, boosted the refundable portion to $1,400 and expanded eligibility.
Biden has called for an expansion, but there have been debates in Congress over the child tax credit design, including the amount, eligibility and refundability, said Gleckman.

Consumers pay for higher tariffs

One of the few tax policy details released by the Trump campaign has been proposed tariffs, or taxes levied on imported goods from other countries, some of which Biden has also supported.
“Directionally, they’re the same on tariffs on China,” Gleckman said, noting that Biden maintained some of Trump’s tariffs and unveiled new ones in May.
Trump wants a 10% universal baseline tariff on all U.S. imports and a levy of 60% or higher on Chinese goods. By comparison, Biden aims for more targeted tariffs.
However, “all evidence points to consumers paying the additional price” for tariffs, Watson said.

Funding extensions amid the budget deficit

As 2025 approaches, there are lingering questions about how to pay for TCJA extensions, particularly amid the federal budget deficit. 
Fully extending the TCJA tax breaks could add an estimated $4.6 trillion to the deficit over the next decade, according to the Congressional Budget Office.
Biden’s top economic advisor, Lael Brainard, has called for higher taxes on the ultra-wealthy and corporations to help fund the extensions for middle-class Americans.  

“Achieving a fairer tax system also means we can’t extend expiring Trump tax cuts for those with incomes above $400,000,” she said during a speech to The Hamilton Project at the Brookings Institution in May.
While Trump has proposed tariffs, the campaign hasn’t specifically addressed plans to fund TCJA extensions. More

One “silver lining” of a job layoff can be a temporary lower federal income tax bracket, said certified financial planner Jaime Quinones with Stockade Wealth Management.
That could offer tax planning opportunities, such as Roth individual retirement account conversions or the 0% capital gains bracket.
However, you should consider your financial goals and run tax projections for the year first.

Alvaro Gonzalez | Moment | Getty Images

Weigh a Roth individual retirement account conversion

One strategy that’s more attractive in a lower-income year is Roth individual retirement account conversions, which transfer pretax or nondeductible IRA funds to a Roth IRA, according to CFP Catalina Franco‑Cicero, a wealth advisor with Tobias Financial Advisors in Plantation, Florida. 
“It’s not a free lunch” because you’ll still owe regular income taxes on the converted balance, she said. But your bill could be lower in a smaller tax bracket.

Converting funds to a Roth IRA “can be a great opportunity for tax-free growth and future tax-free distributions,” Franco‑Cicero said.
Of course, you don’t have to decide on the strategy immediately. You can wait until the end of the year approaches, she said. That way, you’ll have a better gauge of your projected income for 2024, she said.

Leverage the 0% capital gains bracket

If your income is low enough, you could leverage the 0% long-term capital gains tax bracket to rebalance a taxable portfolio or save on future taxes, experts say.
For 2024, you may qualify for the 0% long-term capital gains rate with taxable income of $47,025 or less for single filers and $94,050 or less for married couples filing jointly.

“The 0% bracket is actually pretty wide,” especially for married couples, Quinones said. “You could be six-figure earners and still fall into the 0% bracket.”
That’s because the bracket is based on taxable income, which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

One of the perks of the 0% bracket is a chance to reset an asset’s purchase price, or “basis,” by selling the asset and immediately repurchasing it. By resetting the basis, you can save on future capital gains, experts say.
However, you should run projections of your 2024 taxable income before harvesting gains.
You also need to consider long-term plans for the asset.
The strategy wouldn’t make sense for taxable assets you’re planning to leave to heirs because the assets will automatically get a stepped-up basis when you pass, Quinones explained.

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A feature of the Biden administration’s new income-driven repayment plan that will reduce millions of borrowers monthly payments kicks in on July 1.
Someone earning $125,000 will see their bill fall to $380 a month from $853, according to one analysis.
Here’s what else to know about the upcoming change.

Maca And Naca | E+ | Getty Images

Your student loan bill may get smaller next month.
Here’s why: A feature of the Biden administration’s latest income-driven repayment plan that will reduce millions of borrowers’ monthly payments kicks in on July 1.

For some borrowers, “it’s a dramatic drop,” said higher education expert Mark Kantrowitz.
Last summer, President Joe Biden rolled out the new program, called the Saving on a Valuable Education, or SAVE, plan, describing it as “the most affordable student loan plan ever.” So far, around 8 million borrowers have signed up for SAVE, according to the White House.
Under IDR plans, borrowers pay a share of their discretionary income each month and receive forgiveness after a set period, typically 20 years or 25 years. SAVE replaced the U.S. Department of Education’s former REPAYE option, or Revised Pay As You Earn plan.

Some enrollees have already benefited from reduced bills because the SAVE plan increases a borrower’s income exempted from their payment calculation to 225% of the poverty line, up from 150% under REPAYE. As a result, single borrowers earning less than $33,900 or a family of four making less than $70,200 who are enrolled have seen their monthly bill fall to $0.
But the most generous provision of the program that will soon go into effect slashes the share of discretionary income borrowers have to pay toward their undergraduate student debt each month to 5% from 10%. (Parts of the plan went into effect at different times due to complicated rules around regulatory changes.)

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A person making roughly $50,000 a year with a previous student loan payment under REPAYE of around $228 will now have a monthly bill of $67, according to a calculation from Kantrowitz.
Meanwhile, someone earning $125,000 will see their bill fall to $380 from $853, he said.
(Under IDR plans, a borrowers’ monthly payment isn’t impacted by their loan balance, just the details of their plan and income.)

Reduced bill should be automatic

As long as you’re already enrolled in the SAVE plan, you should see the decrease automatically reflected in your July bill, Kantrowitz said.
Borrowers who have both undergraduate and graduate student loans will pay a weighted average of between 5% and 10% of their income, the Education Department says.

To qualify for a lower payment under the SAVE plan, your total debt will generally need to be greater than a third of your annual income, Kantrowitz said. Borrowers can apply for the program at Studentaid.gov.
Some borrowers, including those who borrowed $12,000 or less, will receive loan forgiveness in as few as 10 years under the plan. Any payments that have already been made under an existing IDR plan or the standard repayment plan will count toward the borrower’s timeline to relief.

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About 36% of surveyed Americans ranked real estate as the top long-term investment above stocks or mutual funds (22%), gold (18%) and savings accounts or certificates of deposits (13%), according to a recent study by Gallup, a global analytics and advisory firm. 
Real estate investment trusts can be a great way to start as they have a “low barrier to entry,” said Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York City.
An REIT is a publicly traded company that invests in different types of income-producing residential or commercial real estate.

Some Americans believe real estate is the best long-term investment. If you are among them, real estate investment trusts, or REITs, might be the easiest way to tap the market. 
About 36% of surveyed Americans ranked real estate as the top long-term investment, more than cited stocks or mutual funds (22%), gold (18%) and savings accounts or certificates of deposits (13%), according to a recent survey by Gallup, a global analytics and advisory firm. 

Fewer of the surveyed adults believe bonds and cryptocurrency are good investments for the long haul, at 4% and 3%, respectively, the report found.
The firm polled 1,001 U.S. adults through telephone interviews from April 1-22. 
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For those people who see long-term investment potential in real estate, REITs can be a great way to start as they have a “low barrier to entry,” said Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York City.
An REIT is a publicly traded company that invests in different types of income-producing residential or commercial real estate. In many cases, you can buy shares of publicly traded REITs like you would a stock, or shares of a REIT mutual fund or exchange-traded fund. REIT investors typically make money through dividend payments.

Some, “you can invest in for as little as $25,” said Francis, a CNBC Financial Advisor Council member.

‘No one gets super emotional about stocks’

Real estate is a popular investment option among some Americans because it can evoke emotion and feeling, unlike stocks and bonds, Francis said.
“No one gets super emotional about stocks,” she said. “But individuals definitely get emotional about real estate.” 
Some people see it as a legacy to give to their children.
“Instead of giving them a portfolio of stocks, I want to give them a house that is physical and they can use,” Francis said as an example.
But buying a property and becoming a landlord takes a significant investment of money and time, more so than other kinds of portfolio assets.
“It’s not easy being a landlord,” said CFP Kashif Ahmed, president of American Private Wealth in Bedford, Massachusetts. “There’s far more to it than just getting a monthly check.”
Once you buy a property and turn it into an investment, you have to manage the property, properly insure it and be able to service it.
Whether you do this yourself or have someone on your behalf take care of the property, it can cost money, Ahmed explained.

REITs can also offer opportunities for diversification. Depending on the company, you are exposed to hundreds or even thousands of different properties or regions, experts say.
You can also invest in different kinds of real estate properties, such as shopping malls, warehouses and office buildings. However, if you invest in a region or sector that experiences devaluations, that price decline will be reflected in your portfolio.
“If there’s a REIT and it’s investing in shopping malls across the country, and shopping malls are not doing well … you’re going to feel that,” Francis said. “You’re not going to be protected.”

How much real estate should be in your portfolio

D3sign | Moment | Getty Images

If you truly want to tap into the real estate market as a long-term investment, “really research on these funds,” Francis explained.
REITs should also contribute to the diversification of your portfolio, “they shouldn’t be all of it,” said Francis. Some advisors recommend REITs should take up no more than 25% of your portfolio, she said.
Be wary about how the REIT will affect your tax situation. REITs often pay out 90% or more of the profits in the form of dividends, which can be subject to ordinary income taxes, experts say.
“It’s as if those dividends came to you and your paycheck at work,” Francis said.
If you don’t need the additional income, try adding the REIT in a tax-sheltered account, such as an individual retirement account, Ahmed said.
“Asset location matters,” he added.

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Higher earners can significantly boost tax-free retirement savings with mega backdoor Roth conversions.
A mega backdoor Roth conversion involves after-tax 401(k) plan contributions, which are shifted to Roth accounts for future tax-free growth.
However, there are some common mistakes, according to financial advisors.

Jamie Grill | Getty Images

Mega backdoor Roth conversions can significantly boost tax-free retirement savings — but this maneuver is not available for all investors and mistakes are common, experts say.
When investors make too much to save directly to a Roth individual retirement account, backdoor strategies can bypass the IRS income limits. A mega backdoor Roth conversion involves after-tax 401(k) contributions, which are shifted to Roth accounts.  

It is more generous than regular backdoor Roth conversions because after-tax contributions can exceed the yearly 401(k) deferral limit, which is $23,000 for investors under age 50. The full 401(k) limit is $69,000 for 2024, including employee deferrals, employer matches, profit sharing and other deposits.
Mega backdoor Roth conversions are “a great tool when used appropriately,” but you need to know your goals first, said certified financial planner Jamie Clark, founder of Ruby Pebble Financial Planning in Seattle.
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Here are some common mega backdoor Roth conversion mistakes and how to avoid them, according to experts. 

Failing to plan for shorter-term financial goals

While mega backdoor Roth conversions can be appealing, some workers focus on the strategy before they have enough cash reserves or brokerage account assets for shorter-term financial goals, Clark said.

Rather than making after-tax 401(k) contributions, you may need the funds to boost your emergency savings, buy a home, pay for a wedding, take a vacation or other priorities.

Missing out on ‘free money’

Before making after-tax 401(k) contributions, you need to consider the full plan limit and other deposits that may still come from your employer, experts say.
For example, many plans have a “true-up” feature, which deposits the rest of your employer match if you max out the plan early. You also could receive a bonus or profit sharing.

You always want to be aware of how much money your company is putting into your 401(k).

Tommy Lucas
Financial advisor at Moisand Fitzgerald Tamayo

“You always want to be aware of how much money your company is putting into your 401(k),” said Tommy Lucas, a CFP and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
For 2024, higher earners could hit the $69,000 plan limit with employee deferrals and after-tax 401(k) deposits. Without leaving space for the true-up or employer profit sharing, “you’re just missing out on free money,” he said.

Infrequently converting after-tax 401(k) contributions

Ideally, you want to convert after-tax 401(k) contributions to a Roth account before there is time for the deposits to grow. Otherwise, you will owe taxes on the earnings at the conversion.
However, “the mechanism for conversion can differ from company to company and plan to plan,” explained CFP Dan Galli, owner of Daniel J. Galli & Associates in Norwell, Massachusetts.
Before starting after-tax 401(k) contributions, you need to fully understand the process for converting the funds to a Roth account, he added.

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