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Investing: Difference between revisions
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* 1-3 will be tax-advantaged (either tax-free or tax-deferred) | * 1-3 will be tax-advantaged (either tax-free or tax-deferred) | ||
* 4-6 will not be tax-advantaged | * 4-6 will not be tax-advantaged | ||
==401(k)/403(b)== | |||
A 401(k) or 403(b) is an employer-sponsored retirement plan.<br> | |||
That means, it is managed by a company cooperating with your employer.<br> | |||
If you work for a for-profit company, you will have a 401k. A non-profit company a 403b.<br> | |||
If you work for the federal government, you will have a thrift savings plan.<br> | |||
For the most part, 401k and 403b rules are identical. | |||
* Employees can contribute up to $19,500 for 2020 ($19,000 in 2019) [https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits] | |||
** These are called "elective deferrals" which are tax-deferred. You may also contribute after-tax deferrals subject to the total maximum contribution below. | |||
* In total, you can add up to $57,000 to your 401k each year, or up to 100% of your income, whichever is lower. This includes both your contributions and your employer's contributions | |||
==Individual Retirement Account (IRA)== | ==Individual Retirement Account (IRA)== | ||