After you have maxed out the match from your employer in your 401(k), you may decide against investing any extra money you earn into that 401(k), and there’s good reason for that. There are other ways to invest your money in accounts with features your 401(k)doesn’t contain. There’s three other ways to save for your retirement: through a health savings account, a Roth IRA, or a traditional IRA. A health savings account offers contributions before tax and if you withdraw the money out for qualified healthcare costs, your withdrawal isn’t taxed at all. In a Roth IRA you get to make tax-free withdrawals and in a traditional IRA you have more flexibility in your investments and have a lower contribution limit than your 401(k).
Key Takeaways:
- Having a healthy and stable savings account might be better for taxes.
- ROTH IRAs and other types of IRAs offer different tax breaks.
- other IRAs might have a lower contribution limit, but better tax savings.
“These other accounts can offer some substantial advantages over workplace retirement plans and are often a better option for retirement savers.”
Read more: https://www.fool.com/investing/2022/01/26/3-better-ways-to-save-for-retirement-than-a-401k/
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