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    Retirement Account Types

    Know what you have. Plain English.

    Traditional 401(k)

    • Through your employer.
    • Contribute pre-tax money. Saves taxes today.
    • Grows tax-deferred. Pay tax when you withdraw in retirement.
    • 2025 limit: $23,500/year, $31,000 if 50+ (catch-up).
    • Required Minimum Distributions start at 73.

    Roth 401(k)

    • Same as 401(k) but you contribute AFTER-tax money.
    • Grows tax-free. Withdrawals tax-free in retirement.
    • Best for: lower-tax-bracket workers (younger or part-time).
    • No RMDs as of 2024.

    Traditional IRA

    • You open it yourself (Vanguard, Fidelity, Schwab).
    • Pre-tax (deductible) IF income is under limits.
    • Grows tax-deferred.
    • 2025 limit: $7,000/year, $8,000 if 50+.
    • RMDs start at 73.

    Roth IRA

    • You contribute after-tax money.
    • Grows tax-free. Withdrawals tax-free.
    • Best account in retirement — withdrawals don\'t affect taxes, Medicare premiums.
    • Income limits — $165,000 single / $246,000 married for 2025.
    • NO required distributions, ever.
    • If over income limit — "backdoor Roth" workaround exists.

    SEP / SIMPLE IRA

    • SEP-IRA: for self-employed. High limit, simple paperwork.
    • SIMPLE IRA: for small business employees.
    • Both pre-tax. RMDs apply.

    Pension / Defined Benefit

    • Old-school employer plan. Promises a monthly check for life.
    • Mostly disappearing in private sector. Still strong for federal, military, state, union.
    • (See our "Pension Lump Sum vs Monthly" tool.)

    HSA — secret retirement account

    • Triple tax advantage if you have a high-deductible health plan.
    • After 65, withdraw for ANYTHING (taxed like IRA) or medical (tax-free).
    • Maximize while working — best account that exists.

    Common retiree question: "Is it traditional or Roth?"

    Look at your account statement. "Pre-tax" or "Traditional" or "Tax-deferred" = pay tax when you withdraw. "After-tax" or "Roth" = tax-free withdrawals. Most workers have both pre-tax 401(k) AND a separate Roth IRA.