Retirement

There's 2 types of retirement accounts, Traditional and Roth

Both accounts are important, and the differences really come down to Taxes. Traditionally, you pay taxes when you withdraw from the account, resulting in your money being Taxed during your later years.

Roth is taxed when you deposit money, and your taxed none when you withdraw from it.

Different people most likely need different accounts. The lower income you have, the less taxes you pay, so for younger people, a Roth is better, to pay less taxes initially. Most people start with in a lower tax bracket than they will end it, meaning they pay less taxes initially than they would rather than paying when they take it out.

If you starting to fund your retirement later in life, you most likely will be making an income that will be similar to when you retire, meaning your better off with a traditional account.

So to summarize

• You pay taxes on a Roth IRA initially

• Traditional IRA you pay taxes when you withdraw

• Roth is better suited for younger people

• Traditional is better for older people

What about 401(k)s?

Like most things, it depends!

Most employers offer to match a certain amount you put in, and then offer no incentive after that.

For example, they might match the first $2,000 you put in, meaning when you put in $2,000, they'll put in $2,000, essentially being FREE money.

Every company offers different plans, but you should prioritize hitting your companies contribution limit, to maximize the money they'll put in. After that, it'll be best to open up a personal Roth IRA or a Traditional IRA to have lower fees, while maintaining Tax advantages.

He put in 96,000 and it grew to over half a million. That'd be a great retirement :)