Now, if you have a business, you have other options. You can have a solo 401(k), simple IRA, SEP IRA. Those are options if you have a business, and they allow you to contribute a bit more than your traditional or Roth IRA. Traditional or Roth IRA is limited to $6,000 a year, if you are under 50. Once you turn 50, then you’re able to add in a $1,000 catch-up contribution to make up for any retirement savings that you didn’t do in the past. The IRS is allowing you to contribute more.
But those are basic options. You’re looking at your employer’s-sponsored plans. If they don’t have 401(k) or any other plan, you will look at your traditional IRA or Roth IRA, and then you’ll look at your other plans if you’re an entrepreneur.
And then don’t forget about HSAs, a health savings account. That’s another way to invest, and some people use those funds to build up their retirement portfolio because of the triple tax advantage. The money you put in is tax-free, the money grows tax-free, and you can withdraw the funds tax-free as long as the money is used to pay for qualified medical expenses. Those are some options for you.
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