Compare the following retirement plans:



Compare the following retirement plans:

| |401K |Traditional IRA |ROTH IRA | |

|Money contributed from gross (pretax) or net | | |Net pay- after tax $ |Net Pay |

|pay (after tax)? |Gross (pretax) |Gross- limited $/year |Limited $5500/ year |Limited contribution |

| | |$5500 | |$5500/year |

| | | | | |

|Pay taxes at withdrawal time (on earnings and | | |NO taxes on earnings ever! |No Taxes |

|contributions) |Yes |Yes | | |

|Age of withdraw w/o penalty? |59 ½ | 59 ½ | 5yr. house |Can transfer to ROTH IRA anytime. Or |

| |Must be fully vested to get |Must w/d by 70.5 yrs | |after $15,000. |

| |100%. | |Contributions anytime. | |

|Employer |Yes, if match |No. individual plan |No individual plan |No individual plan, designed for people |

|Contributes to plan? | | | |with no retirement from work. |

| | | | | |

|Advantages? |Free $ co. match |Lowers taxable income while | Earning tax free, |No Fees. Start with $2. |

| |Lower taxable income while |earning. |Variety of accounts |Safe and secure, No RISK |

| |earning. |Have a professional help you |You decide how much risk to take. Can use|Safe Starter Account. |

| | |select funds. |professional advisor. | |

| | | |Flexible/ ed. home | |

|Disadvantages |Limited investments, may |Can’t w/d before 59.5 |Too high of income, can’t contribute. |Not huge returns on $ |

| |have high fees | | | |

| |Self-manage | | | |

Why should you have more than one type of retirement plan?

Compare the following retirement plans:

| |401K |Traditional IRA |ROTH IRA | |

|Money contributed from gross | | | | |

|(pretax) or net income (after | | | | |

|tax)? | | | | |

|Pay taxes at withdrawal time | | | | |

|(on earnings and contributions)| | | | |

| | | | | |

| | | | | |

| | | | | |

|Age of withdraw w/o penalty? | | | | |

|Employer | | | | |

|Contributes to plan? | | | | |

| | | | | |

|Advantages? | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

|Disadvantages? | | | | |

| | | | | |

| | | | | |

| | | | | |

| | | | | |

Why should you have more than one type of retirement plan?

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