Planning For Retirement: Types Of Retirement Accounts Explained
In this video, I’m going to be going over 5 types of retirement accounts.
Explanation of 401k matching
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Traditional Individual Retirement Account (IRA)
-contributions are tax deductible
-earnings grow tax deferred
-annual contribution limit is $6,000 or $7,000 if you’re age 50+
-IRAs can be invested in stocks, bonds, mutual funds, annuities, unit investment trusts, gov securities, and US gov issued silver and gold coins
-distributions begin at age 59.5
-10% penalty + income tax if funds are withdrawn early
-exceptions: death, disability, education expense, first time home buyer, medical premiums for unemployed
Roth IRA
-contributions are made after tax
-not tax deductible
-annual contribution limit is $6,000 or $7,000 if you’re age 50+
-as long as the account has been open for 5 taxable years and you’re age 59.5, earnings can be withdrawn tax free
Savings Incentive Match for Employers (SIMPLE) IRA
-employee sponsored retirement plan offered by small businesses with less than 100 employees
-contributions are made pretax
-earnings grow tax deferred
-you can choose from different investments such as stock and bond mutual funds
-money can be withdrawn at age 59.5, and there’s a 10% tax penalty if withdrawn before
403(b)
-only available to employees of public educational institutions
-earnings accumulate tax deferred
-deferred amount is excluded from gross income
-current contribution limit is $19,500
money can be withdrawn at age 59.5, and there’s a 10% tax penalty if withdrawn before
401k
-employee can contribute a percentage of their salary up to a max amount of $19,500
-contributions are excluded from gross income
-earnings are tax deferred
-employers can match contributions up to a specified percentage
00:00 - Intro
00:46 - Traditional IRA
02:03 – Roth IRA
02:45 – SIMPLE IRA
04:17 – 403(b)
04:55 – 401k
06:05 – Outro
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