A look at the 4 main types of Retirement Accounts
1/ Traditional IRA
- Contribute PRE-Tax Dollars
- Gains are tax deferred
- Tax Deductible (up to certain income limits)
- Contribution limit: $6,000 in '22 and $6,500 in '23`
- No income limit to contribute
- Contribute PRE-Tax Dollars
- Gains are tax deferred
- Tax Deductible (up to certain income limits)
- Contribution limit: $6,000 in '22 and $6,500 in '23`
- No income limit to contribute
2/ Roth IRA
- Contribute AFTER-Tax Dollars
- Gains grow tax free
- Not Tax Deductible
- Income Limits (<$144K) limit increases in '23
- Contribution limit: $6,000 in '22 and $6,500 in '23`
- Backdoor Roth IRA option available to higher income households
- Contribute AFTER-Tax Dollars
- Gains grow tax free
- Not Tax Deductible
- Income Limits (<$144K) limit increases in '23
- Contribution limit: $6,000 in '22 and $6,500 in '23`
- Backdoor Roth IRA option available to higher income households
3/ Traditional 401(k)
- Contribute PRE- Tax dollars
- Gains are tax deferred
- Tax Deductible (up to certain income limits)
- Contribution limit: $20,500 in '22 and $22,500 in '23`
- No income limit to contribute
- Contribute PRE- Tax dollars
- Gains are tax deferred
- Tax Deductible (up to certain income limits)
- Contribution limit: $20,500 in '22 and $22,500 in '23`
- No income limit to contribute
4/ Roth 401(k)
- Contribute AFTER-Tax Dollars
- Gains grow tax free
- Not Tax Deductible
- Contribution limit: $20,500 in '22 and $22,500 in '23`
- No income limit
- Contribute AFTER-Tax Dollars
- Gains grow tax free
- Not Tax Deductible
- Contribution limit: $20,500 in '22 and $22,500 in '23`
- No income limit
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