The Types of Retirement Accounts [Which Is Best For You?]

If you are just getting started with your finances, you might not realize how many different types of retirement accounts currently exist. 

Investing for Retirement

The main reason you should start investing for your retirement as soon as possible is because of a very effective rule called compound interest. Your investments are the only “savings” that will compound exponentially over time, making you thousands of dollars by the time you’re retired.

Employer-Sponsored Retirement Accounts

401k overview

A 401k is an employer-sponsored plan that will allow you to contribute to retirement savings through your employer. There are a few types of 401k plans: - Traditional 401k - Roth 401k

Employer-Sponsored Retirement Accounts

Pension Plans

Pensions are also known as “defined benefit plans” and are a more traditional type of retirement account. With these plans, you work for one employer for several years, and once you retire they pay you a check every month.

Self-Managed Retirement Accounts

Taxable Brokerage Account

A taxable brokerage account is your standard investing account. There are no contribution limits, income limits and you have more choice.

Self-Managed Retirement Accounts

Traditional IRA

The traditional IRA is an account that is separate from your employer and will allow you to grow your money tax-free.

Swipe up now for more  financial tips!