Studies have shown that Americans aren’t saving enough for retirement. These vehicles have a tax benefit to encourage people to save.
You’ll have more money to save if you can put it away without taxes. That’s what the government thinks, so they’ve created IRAs, 401(k)s, education savings plans — such as the 529 Plan and the Coverdell savings account — to help you make the most of your savings.
All IRAs are not alike. We break down the differences between traditional and Roth IRAs, SEP IRAs, SIMPLE IRA and self-directed IRAs.
The federal Coverdell plan and the state-sponsored 529 let you save for your child’s education and withdraw the money tax-free.
Penalty-free IRA withdrawals
Here are seven instances when you can withdraw from your IRA without a penalty, even if you’re not 59 1/2 years old.
A 401(k) is an employer-sponsored plan that lets the employee put in pretax dollars — and sometimes the employer matches the savings.