Retirement Investment Strategies—The Basics
Contributing to a tax-deductible retirement account is a well-known way to reduce taxes. There are a multitude of deductible retirement account types, such as Traditional IRAs and 401(k), 457, and 403(b) accounts. Each of these account types has its own little twists in the rules that govern it, but the basic concepts behind each type of retirement account are the same. Each account type offers a deferral of taxes on any growth and a tax benefit for contributions. The government created these “tax qualified” savings vehicles to encourage people to save for their own retirement by giving them tax incentives for doing so. In this chapter you will learn how each of these retirement accounts works, what thorns you may encounter when using them, and when their use could actually turn to your detriment instead of your gain. You will also learn about how the new health care laws affect your retirement accounts, as well as a little known credit for retirement contributions that can bring amazing benefits to those who qualify for it.