What Type of Retirement Investment Account Should I Be Using?
There are different types of retirement investment accounts one can have depending on your age and tax brackets. This article goes into more detail.
Published April 27, 2021.
Well, this depends on so many factors, as not everyone has access to an employer-sponsored retirement plan. If you want to save additional money beyond the annual 401 k contribution limits, I would recommend the traditional IRA retirement plan for saving on your own.
I believe the Traditional IRA is for people who’d like to save on their own and want to supplement their retirement savings. You’re eligible for it if you have a taxable income and the contributions you make to a traditional IRA are usually tax-deductible. Depending on your age, you can contribute up to $6000 per year in a Traditional IRA. If you’re over the age of 50 years, you can contribute up to $7,000 per year.
The Roth IRA is for people who want tax-free withdrawals in retirement, whereas the Spousal IRA is for married couples where one spouse is not working. Also, you may want to consider Fixed Annuities if you want to supplement your retirement savings strategies.
Overall, if you think your income taxes are higher today, opt for a Traditional IRA and make the most of lower taxes on withdrawals in retirement. If you’re in a lower tax bracket today than you will be in retirement, a Roth 401 k account is a better option for you.