Starting to really look into my retirement, and trying to figure out the baseline differences between these:
401(k)
Traditional IRA.
Roth IRA.
SEP IRA.
Simple IRA and Simple 401(k)
Solo 401(k)
My company provides a basic 401(k) that I never put much thought into, just set an amount monthly to contribute and that was that.
In: 15
401k: You (and maybe your company) put in $10000 before federal income taxes get paid, so you aren’t taxed on that income. While you wait to retire, that $10000 (hopefully) grows tax-free. When you eventually retire, it’s grown into $50,000. If you withdraw $5000 after retiring, that counts as income and is taxed as income.
Traditional IRA: You put in $10000 before federal income taxes get paid, so you aren’t taxed on that income. While you wait to retire, that $10000 (hopefully) grows tax-free. When you eventually retire, it’s grown into $50,000. If you withdraw $5000 after retiring, that counts as income and is taxed as income.
Roth IRA: You put in $10000 after federal income taxes get paid, so you’ve been taxed on that income. While you wait to retire, that $10000 (hopefully) grows tax-free. When you eventually retire, it’s grown into $50,000. If you withdraw $5000 after retiring, it doesn’t count as income and isn’t taxed.
Simple IRA: A traditional IRA you and your company can put money into.
SEP IRA: A traditional IRA your company can put money into but you can’t.
Simple 401k: a 401k your company is required to put money into
Solo 401k: a 401k for a company owner
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