There are several types of retirement accounts available in the United States, each with its own set of rules and benefits. Some of the most common types of retirement accounts include:
-
401(k) plans: Employer-sponsored retirement plans that allow employees to contribute a portion of their pre-tax income to the account. Employers may also offer matching contributions up to a certain amount.
-
Traditional IRA: An individual retirement account where contributions may be tax-deductible, and taxes are paid upon withdrawal in retirement.
-
Roth IRA: An individual retirement account where contributions are made with after-tax dollars, and qualified withdrawals are tax-free in retirement.
-
Simplified Employee Pension (SEP) IRA: A retirement plan designed for self-employed individuals or small business owners that allows for higher contribution limits than traditional or Roth IRAs.
-
Solo 401(k): A retirement plan designed for self-employed individuals or small business owners that combines the features of a traditional 401(k) and a SEP IRA.
-
403(b) plans: Retirement plans for employees of certain tax-exempt organizations, such as public schools and non-profit organizations.
-
Defined Benefit Plans: A traditional pension plan that provides a fixed, predetermined benefit at retirement based on factors such as years of service and salary.
Each of these retirement accounts has its own set of rules and benefits, and individuals should consult with a financial advisor or tax professional to determine which option is best for their unique financial situation.
