IRA & 401k

Think of an IRA as something you set up on your own, while a 401(k) is typically offered by your employer. With an IRA, you have more control over your investments, and it comes in two flavors: Traditional (where you might get a tax break now) and Roth (where you enjoy tax-free withdrawals in retirement). On the other hand, 401(k)s often come with employer contributions, which is like free money for your retirement.

Great question! For 2023, the annual contribution limit for IRAs is $6,000, or $7,000 if you’re 50 or older. On the flip side, 401(k) limits are a bit higher, at $20,500 for those under 50 and $27,000 if you’re 50 or older. But remember, these limits can change, so it’s a good idea to keep an eye on them.

Absolutely! You can be a double-dipper in the world of retirement savings. You can contribute to both an IRA and a 401(k) in the same year. Just keep in mind that there could be some rules around tax deductions, so it’s always smart to check with a financial advisor.

If you take money out of your IRA or 401(k) before the age of 59½, you might face some early withdrawal penalties and taxes. There are some exceptions, like using the money for certain medical expenses or buying your first home, but it’s generally a good idea to leave your retirement savings alone until you’re, well, retired.

Time is your best friend when it comes to retirement savings. Starting in your 20s or 30s gives your money more time to grow and compound. But hey, it’s never too late to start. Even if you’re closer to retirement age, every dollar you save now still makes a difference in your future financial security. So, the best time to start? Today! Follow our website for more timely updates on the market conditions and your investment opportunities.