Transcript:
Easan Arulanantham:
What kind of accounts can I regularly put money into for retirement?
Tom Vaughan:
Go? Okay, well, there’s probably some pieces of that that would be interesting to know, in terms of just the, you know, when you say for retirement, most people think about, I guess what I call traditional retirement accounts, like a 401k, for three B and IRA, Roth IRA, you know, but when I think about put where I can put money, or what types of accounts I could use, you know, for, for retirement, I think about the three buckets, you know, the taxable account, the tax deferred accounts, and then the tax free accounts. And so it’s an interesting question, you know, I would want to fill and, you know, kind of make sure I have money in all three of those buckets, if at all possible, I think that’s very powerful. But in that tax deferred bucket is where you really have the most options. You know, I mean, I know you were working on a case recently, with a small business owner trying to, you know, spell out all the different options, you know, that are available to a small business owner in that pure retirement tax deferred type of account. And what did you find? What were some of the options that were available there?
Easan Arulanantham:
So all along, give probably like four, I’d say you have your solo 401k. A SEP IRA, which is a Simplified Employee Pension IRA. You have a simple IRA to and then you we you have a straight regular 401k, who’s kind of like the four options for a small business Yeah. solos are set up essentially, for when you don’t, when you’re a self employed person without you have no employees. Yeah. SEP IRA is when you want to have like a plan, but you want to be the person, the business wants to contribute rather than the employees. Yep. SIMPLE IRA is where the players can differ. But you’ll have the business will have to do a small match, or kind of like an automatic contribution. But the limits are below what a 401k has a 401k has the most flexibility, but it can be the more complex and more costly plan. So he really depends on your business. So those are the options just in your current deferred space for a small business.
Tom Vaughan:
Yeah. So I mean, one of the questions that I would ask whoever asked that question is, you know, what’s your situation? Are you employed at a company? What are the options within that company? Do they have a Roth 401k? To have a regular 401k? Are they doing a simple IRA? Do they have nothing? If they have nothing, then you can still do an IRA, for example. And depending on your income limits, you might be able to do a Roth 401k Roth IRA contribution. So you know, there’s all these different parameters. If you’re at a nonprofit, they often use what’s called a 403. B, if you had a municipality, they use mostly what’s called a 457. Although there are a whole bunch of different pieces inside the municipality world to it’s kind of interesting. So yeah, there’s there’s actually a fair number of different places that are available. For most people, there’s something you can put into that tax deferred bucket. And for for less, but for a lot of people, there’s still places to put into that tax free bucket, which I think is important, but don’t ignore the taxable bucket. Regardless, if you’re getting ready for retirement, having some liquid assets outside of these retirement plans, has some advantages and disadvantages too, but that’s true with all of them. When you get all three together. I think the overall advantages are at the highest level.