What are the different types of retirement accounts?

What are the different types of retirement accounts?

There are several types of retirement accounts, including 401(k)s, IRAs, Roth IRAs, and SEP IRAs. Would you like to know more about any specific type?

Can you explain the difference between a traditional IRA and a Roth IRA?

Sure! A traditional IRA allows you to make tax-deductible contributions, and you pay taxes on withdrawals in retirement. A Roth IRA, on the other hand, requires you to pay taxes on contributions upfront, but withdrawals in retirement are tax-free.

Which one is better for me?

It depends on your current tax situation and your expected tax situation in retirement. If you think you'll be in a higher tax bracket later, a Roth IRA might be better. If you want tax deductions now, a traditional IRA could be more beneficial.

What are the contribution limits for these accounts?

For 2023, the contribution limit for both traditional and Roth IRAs is $6,500, or $7,500 if you're age 50 or older. For 401(k)s, the limit is $22,500, or $30,000 if you're 50 or older.