After-tax.
In plain English
After-tax refers to money that has already been taxed as income before you put it to work. It is the opposite of pre-tax. A Roth IRA or Roth 401(k) is funded with after-tax dollars: you get no deduction now, but the money grows and, if you follow the rules, comes out completely tax-free in retirement. Knowing whether a dollar is pre-tax or after-tax tells you when the tax gets paid, which is the whole difference between a Roth and a traditional account.
01Why it matters
Whether you contribute pre-tax or after-tax decides when you pay the tax, which is the core choice between a traditional and a Roth account.
02The math, step by step
You earn 100 dollars, pay 22 in tax, and put the remaining 78 into a Roth IRA. That 78 is after-tax money; in retirement you withdraw it and its growth tax-free.
03What this is NOT
After-tax is NOT pre-tax. Pre-tax money is set aside before income tax and taxed later when you withdraw; after-tax money is taxed now and, in a Roth, comes out untaxed.