Tax-Deductible & Tax-Deferred
Investments:
There is a variety
of ways you can invest for retirement; with your own self-employment
retirement account, a supplemental retirement account or
an employer sponsored account.
Some retirement accounts are tax-deductible, some are tax-deferred
and some are both tax-deductible and tax-deferred. The latter
is where the really big savings come in. Any one of them
is good to have. Just get at least one type.
Self-Employed or Small Business Retirement Accounts:
- IRA or Roth IRA (for individuals)
- SEP IRA (Simplified Employee Pension Plan - easy to setup)
- Keough (more complicated to set up)
- Simple IRA
- Employer Sponsored Retirement Accounts:
- 401K (for profit companies)
- 403b (for non-profit organizations)
- Deferred compensation plans (for non-profit organizations)
Employer-Sponsored Plans: Can contain both tax-deductible
and tax-deferred earnings. Some Employers also match or partially
match whatever funds you contribute to the account. This
can leave you with a substantial sum at retirement.
- Individual Retirement Options:
- IRA (both non-deductible and deductible types)
- Roth IRA (non-deductible, but earnings grow tax free)
- With the Roth IRA, money can be taken out one time for:
- Education up to $10,000.
- First time home buyer up to $10,000.
You must meet minimum requirements for all retirement plans.
Retirement Plan laws are constantly changing. Access the
Internal Revenue Service website for updates, just use the
link at our Business
and Financial Guide.
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