Which Type of Retirement Account Is The Best For You?
If you are just getting started with your finances, you might not realize how many different types of retirement accounts currently exist.
But don’t worry! It’s easier to understand than you might think once each account type is broken down into more straightforward terms.
A 401k is an employer-sponsored plan that will allow you to contribute to retirement savings through your employer.
There are a few types of 401k plans:
Your contributions will grow tax-free over time, and you’ll pay income tax when you withdraw them after the age of 59 ½.
Your money also grows tax-free, but you’ll be contributing to this account with your after-tax income. So once you withdraw, you won’t need to pay taxes on any growth.
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