Here is the best way:

1) only deduct the right amt from your paycheck to max out your 401k.
2) put the rest of the money you want to invest into an IRA since it will be tax-deductible.

GL.

First of all, congratulations on investing 30% of your income! That's awesome and you're really going to be happy that you did so.

I'd cut back to the percentage that gets you to $15,500 with your final paycheck of the year (don't get there early -- you might not get all your employer match if you do!). Then set up a Roth IRA as a place for the extra, up to another $4000 per year (and both numbers will continue to go up, so you'll have to do this percentage-calculation each year).

The reason is simple: if you put the extra into your 401k, then you pay taxes before the money goes in and pay taxes on the profits when the money comes out. However, if you put it into a Roth, you pay the same taxes before the money goes in, but *no* taxes when the money comes out. It's that simple.

Once you fill up your 401k contribution *and* your Roth contribution, I'd start thinking about investment vehicles that aren't deferred, such as regular Vanguard funds. If you're investing 30% of your income, then you're probably not going to need to wait until you're 59.5 to retire. You're going to want some money to live on between when you retire and when you turn 59.5 and can get to the 401k and Roth without penalty (you can get some of the money early -- research IRS code 72(t) for details on that -- but it's not a whole lot).

Again, congratulations and good luck!

Doug

I would not contribute beyond the max in your 401k. Those plans usually have high fees, and you don't need all your investments in one fund or fund family anyway, if you're accumulating that much. Make sure you are maxing out a Roth IRA if you're eligible, and then start stashing money in regular taxable accounts (index funds are cheapest, perform best, and have best tax treatment overall).

But don't focus just on retirement. Make sure you have a year's worth of expenses/salary in a money market fund. That way you have flexibility to leave your job, protection in the event of a layoff or market recession, and a big cash cushion in case you want to start retirement early, buy a big ticket item, or travel extensively.

You might also want to diversify your investments to include real estate and other asset classes.

Do not put after tax into a 401k unless your 401k has ROTH option (in which case you're limited to the 15.5k in total). Makes no sense to put after tax money into a regular 401k and have the earnings taxed when you take it out when you can put that same after tax money into a ROTH and get the earnings tax free. Of course this is on the assumption that your income allows you to contribute to a ROTH. If it doesn't, I'd still look for other investments to park my money in...Tax Free Municipal Bonds as one example, REITS, Land, etc etc etc...whole point is to postpone the taxation of the earnings.