An after-tax 401(k) gives you the ability to supersize your retirement contributions, helping you reach your investment goals even faster. You can still have an after-tax 401(k) even after you’ve maxed out your traditional or Roth 401(k) contributions for the year, if your employer allows it. Here’s how an after-tax 401(k) works, and what you need to know to see if it’s right for you.

As you are likely aware, early withdrawals from an IRA, 401(k), 403(b), or other qualified retirement plans, in most cases, are subject to a 10% penalty. That means early withdrawals are taxed and an additional 10% is taken from the withdrawal as a penalty.

Historically, however, there have been numerous ways to avoid the penalty – if for example the funds were used for the purchase of a first home, higher education, or disability costs. While taxes could still apply to these circumstances, the 10% penalty wouldn’t. Now, there are new penalty-free access points to both IRA and company plan retirement accounts made available by the SECURE 2.0 Act update.

If you’re not quite sure how much you should be saving for retirement, these tips are a good place to start.

Stay on Track for Retirement by Knowing How Much You Need to Save by What Age

You’ve heard the advice time and again: Start saving as soon as you possibly can so you can harness the power of compound interest. But when you have a savings account that only earns, say, 1 percent a year, you’re probably thinking, “What’s the point?”