There is no substitute for time and compounding returns when it comes to building wealth. Retirement plans allow for tax-deferred growth on your money, so saving early and deciding which retirement plan is best for you can be the difference between hundreds of thousands or millions of dollars.
Not all retirement plans are created equal, and your specific circumstances may make you eligible for only certain plans. Furthermore, there are many choices – Traditional or Roth plans, 401(k) or IRA, and even more complicated options if you are self-employed or a small business owner.
Retirement plans are tax-advantaged savings plans that allow for your money’s accelerated growth. Almost all types of retirement plans will enable you to invest in various assets without incurring any capital gains taxes for many years while you save for retirement.
Those who use Roth plans make their contributions with post-tax dollars, so there is no immediate tax deduction. However, Roth accounts are never taxed again as long as you satisfy the age requirement (59½ +) and hold the account for a minimum of five years (Roth IRA restriction).