Retirement vehicles: Introduction

The rarefied tax-free or tax-deferred air of a specialized retirement account gives your little nest egg a chance to grow into a gigantic one.

Some limitations on retirement accounts may be imposed: for instance your workplace may offer a SEP-IRA instead of a Roth 401(k), or you may make too much money to qualify for a Roth IRA. Still, every type of retirement vehicle comes with benefits and perks.

What can you expect to learn from this chapter:
  • Types of retirement vehicles
    The right tools are vital when it comes to saving for retirement. You wouldn't try to bail out a sinking ship with a teaspoon and you shouldn't save for retirement with just any old savings account.
  • Workplace retirement plans help you save
    Employers encourage retirement planning by offering opportunities to save, with tax breaks.
  • Roth 401(k)
    With a Roth 401(k) option, employees can pay taxes on their contributions now and enjoy the earnings tax-free later.
  • Self-employed 401(k)
    Earning big bucks and self-employed? Then this could be the retirement plan for you.
  • Traditional IRA vs. Roth IRA
    Though the Roth IRA is the darling of the financial world, the traditional IRA offers its own set of benefits.
  • Simple IRA
    Simple IRAs live up to their name. Employers love them and so do their employees.
    The Simplified Employee Pension Plan offers flexibility to self-employed workers who want to stockpile money for retirement.



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