One employment benefit that many employers offer is a 401(k) plan. However, not all employers offer 401(k) benefits, which can leave an employee questioning their options for saving for retirement. At Harvest Wealth Partners, we can answer all of your questions about retirement planning, as well as alternatives to 401(k)s.
A 401(k) is a type of retirement savings plan that is tax-advantaged for the saver. Offered by employers, 401(k)s are funded by a direct allocation of funds from an employee’s paycheck each pay period; sometimes, employers offer matching contributions.
While a 401(k) is one of the most traditional ways to save for retirement, it’s certainly not the only one. There are many other ways to save for retirement, regardless of what your employer offers you. Some other investment options for saving for retirement for individuals include:
SEP IRA. A SEP IRA is a retirement plan savings option for self-employed individuals. SEP accounts have contribution limits of 21 percent of self-employment earnings or $61,000 per year, whichever is less.
Roth IRA. A Roth IRA is very similar to a traditional IRA but for the fact that qualified distributions are tax-free, but contributions are not tax-deductible. In other words, you don’t have to pay any taxes on any investment gains you make.
Traditional IRA. Finally, a traditional IRA is similar to a Roth IRA except that you pay taxes on the money in an IRA at the time that you withdraw it, but you can deduct contributions to your IRA on your taxes at the time you make them. Your money grows on a tax-deferred basis in this type of account.
Navigating the strategies for saving for retirement can be complex. At Harvest Wealth Partners, we are here to help you make a decision about which retirement account is best for your needs and financial goals. To learn more, please reach out to our professionals today.
Harvest Wealth Partners is committed to helping our clients work towards a successful future. We believe in your potential to understand the financial options that can lead you to your goals. Call us today to partner with our team. We look forward to continuing our mission for years to come.
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