Something that should be on the mind of every working American is their retirement. Making plans for your retirement can allow you to enjoy those golden years in your life. While saving money is a great thing to do, there are other ways of building up the retirement funds that you are going to need to get you through the later years in life. There are two popular ways to do this with a 401K and/or an IRA. You might be wondering which one is better, or what the difference between the two actually is? Mark Dicus & Company is here to talk about these two avenues for retirement so that you can make the best choice for your circumstances.
What is 401k Plan & How Does it Work?
n of the most popular choices when it comes to planning and saving for retirement is a 401K. This allows those that are working to contribute to their retirement using pre-taxed money to do so. One of the biggest benefits that comes with this type of retirement account is that you are not only saving for your retirement, but you are also lowering your taxable income at the same time.
How Do I Maximize My 401k Contribution?
There are some employers that don’t only offer a 401K for their employees, but they also match whatever contribution their employees make up to a certain dollar amount. To be fully vested in your 401K, it means you are maxing out your contributions to whatever maximum your employer will match. When you aren’t matching what your employer is willing to pay toward your 401K, you are basically leaving money on the table. While it might make things a little pinchy as far as your current finances go, you might be glad you did it down the road.
How Does an IRA Work?
If you choose to save for retirement using an IRA, it is also a great way to create personal wealth for later in life. This type of retirement account is an account you will put your money directly into that can help you once you have hit retirement age. There are two types of IRA accounts you can choose from:
– Traditional IRA: This IRA account is money that you will contribute to and won’t be taxed until you take the money out later; similar to a 401K.
– Roth IRA: This type of IRA account is money that has already been taxed so you won’t have to pay taxes on it when you withdraw it in retirement.
Bookkeepers, Accountants & More in Summerlin, North LV, Henderson, Lone Mountain Village & Greater Las Vegas, Nevada
If you are unsure as to how you should prepare for your retirement years, you can turn to Mark Dicus & Company to help you sort it all out. We will help guide you through the different options that you have and what tax implications they can have for you once you retire. Call us today!