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401(k) Retirement Plans and Individual Retirement Accounts

Machen Wealth offers our clients services pertaining to various Retirement Plans including IRAs, 401(k) and 403(b).

An IRA is an account set up that allows you to save for retirement with tax-free growth or on a tax-deferred basis. There are different types of IRAs with different benefits:

  • Traditional IRA - Wages are contributed before taxes from each paycheck, like a deferred salary. Taxable income drops by the amount you contribute. However there are restrictions on how early you can access the funds.
  • Roth IRA - You make contributions with money you’ve already paid taxes on, and your money may potentially grow tax-free, with no taxes paid on withdrawals in retirement. It offers better flexibility with free access to your money as long as you’ve held the account for a minimum of 5 years.
  • Rollover IRA - A Traditional IRA intended for money "rolled over" from a qualified retirement plan. Rollovers involve moving eligible assets from an employer-sponsored plan, such as a 401(k) into an IRA.

A 401(k) is a retirement savings plan sponsored by an employer. It lets employees invest a portion of their paycheck before taxes are taken out. Most companies allow you to enroll in a 401(k) right away, although some smaller employers might make you wait up to a year.

A 403(b) plan is a retirement plan offered by public schools and certain charities and is similar to a 401(k) plan maintained by a for-profit entity. It lets employees defer some of their salary into individual accounts. The deferred salary is generally not subject to federal or state income tax until it's distributed. However total contributions to each employee’s 403(b) account or annuity are limited.

Fortunately, you don't have to choose between an IRA and a 401(k) or 403(b); you can contribute to both. Machen Wealth can help you determine what’s best for you based on your financial needs and goals. To schedule a consultation with Scott Machen regarding Individual Retirement Accounts, call 916-526-2680 or email us at scott@machenwealth.com

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If you’re feeling apprehensive about your financial future and need someone to act as a sounding board to bounce ideas off of, contact us to schedule a FIT meeting. (916) 526-2680