3 Types of Retirement Plans

There are many different types of retirement plans that you could potentially choose from. Here are a few of the most popular types of retirement plans available.

1. 401k

A 401k is offered by employers as a way for employees to save money on a pretax basis towards retirement. You can use the money in the account to invest, and the returns will not be taxed. Upon the age of retirement, you can withdraw the money and then pay regular income taxes on it. One of the benefits of this type of account is that your employer can contribute money to the account and receive a tax break for it.

2. IRA

The IRA is another type of pretax investment account that is widely available. This can be set up on your own through any financial broker. With this type of account, you will have a wide variety of investment choices and supreme flexibility.

3. Roth IRA

The Roth IRA is similar to the traditional IRA except in the way that taxes are handled. With the Roth IRA, you pay taxes before you put the money in the account. Then, all of the money that you make in returns and eventually withdraw is tax-free.

blog comments powered by Disqus