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by pfranz
2232 days ago
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Don't forget taxes! Both on contribution and withdraw. Those under 50 are capped at $19k /year for 401k and $7k /year for IRA. Keep in mind you can't start withdrawing until age 59 1/2. So any money accrued above those limits will be taxed and any money you need to withdraw before that age will need to be separate and taxed. |
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To clarify, the same money generally isn't taxed twice. Contributions to pre-tax retirement accounts are not taxed, but distributions are. On the other hand, contributions to Roth accounts come from taxable compensation, but qualified distributions are tax-free. Finally, you buy taxable investments with after-tax principal, and only its earnings are taxed later.
> Keep in mind you can't start withdrawing until age 59 1/2
This doesn't apply to taxable investments, obviously, but even for retirement accounts, there are ways around that.
https://www.madfientist.com/how-to-access-retirement-funds-e...