There was a time when American workers could rely on corporate pension plans and Social Security to support their retirement needs. Nowadays, pensions are scarce, and the future of Social Security is murky at best.
This is concerning, considering that one in four Americans haven't saved anything for retirement, and even those who have saved are not saving enough.
Fortunately, you don’t have to be in the same boat. While the US tax code is undeniably complex, it also offers great flexibility when it comes to retirement savings.
Americans have access to a wide range of retirement accounts and their variations, including types like the 401(k), Solo 401(k), 403(b), 457(b), IRA, SIMPLE IRA, Defined Benefit Plans, and more.
There are also specialized savings tools available for specific life stages or events (think healthcare and education). You can also choose between Traditional and Roth account variants, and gain the ability to self-direct your accounts.
No other Western nation offers such a wide array of retirement and saving tools.
But this plethora of options can lead to confusion and frustration – it takes a tax law degree to figure them all out.
Which ones are the best? Which one should you prioritize? How much of your earnings can you shelter from taxation each year? What options are available for employees vs self-employed individuals?
This report aims to address these questions by outlining the retirement and savings accounts that corporate employees and entrepreneurs should consider.
We provide a clear and simple order of preference to help you understand the best approach for your circumstances.
It’s true that the US tax code is amazingly complicated – and only becoming more complex to navigate. Just speaking of retirement accounts alone, the three- and four-letter soup can drive almost anyone nuts – think HSA, Coverdell ESA, 529, 401(k), Solo 401(k), 403(b), 457(b), IRA, SIMPLE IRA, Defined Benefit Plans, etc. Yet, such a…
