Life with Physics

This post is for knowledge sharing only. It is not intended to be investment or tax advice. 0. Account Overview  Table 1 Common retirement  accounts in U.S. I summarizes the common retirement accounts in Table 1:  The second row in Table 1 lists the company-sponsored accounts that are offered through employers. The third row in Table 1 lists the individual retirement accounts (IRA) that is unrelated to employments. The columns in Table 1 are about different tax advantages as described below. WARNING: because of the tax advantages, there are also limitations and specific rules imposed by IRS for early withdrawal before the retirement age. For accounts listed in the second column,  Contributions are made with before-tax dollars . The money taken out will be taxed as regular income in the year of withdrawal. For accounts listed in the third column,  Contributions are made with after-tax dollars . The money taken out is  tax free . For after-tax 401K in the fourth column, Contributions are