Retirement Planning: Tax-Advantaged Accounts Explained

Planning for retirement involves more than just saving money—it's about saving smart. Understanding different tax-advantaged retirement accounts can help you build wealth more efficiently.

401(k) Plans

401(k) plans are employer-sponsored retirement accounts that allow you to contribute pre-tax dollars, reducing your current taxable income. Many employers also offer matching contributions, which is essentially free money.

Traditional IRAs

Traditional IRAs allow tax-deductible contributions (subject to income limits) and tax-deferred growth. You'll pay taxes when you withdraw funds in retirement.

Roth IRAs

Roth IRAs are funded with after-tax dollars, but qualified withdrawals in retirement are completely tax-free. This can be especially beneficial if you expect to be in a higher tax bracket during retirement.

SEP-IRAs and Solo 401(k)s

Self-employed individuals and small business owners have additional options like SEP-IRAs and Solo 401(k)s, which allow for higher contribution limits.

Choosing the Right Account

The best retirement account for you depends on your current tax situation, expected retirement income, and long-term financial goals. A financial advisor or tax professional can help you determine the optimal strategy.

Our team can help you understand which retirement accounts make the most sense for your situation and how to maximize your contributions.