🏦 Retirement Accounts: Building Wealth for the Long Haul

Explainer

Retirement accounts are designed to encourage long-term savings through tax advantages.

Types:

• 401(k) – Employer-sponsored, tax-deferred contributions
• Roth IRA – Post-tax contributions, tax-free withdrawals in retirement
• Traditional IRA – Pre-tax contributions, taxed withdrawals
• SEP IRA / Solo 401(k) – For self-employed and small businesses

Comparison: Roth IRA vs. Traditional IRA

• Roth IRA: Better if you expect higher taxes in retirement
• Traditional IRA: Better if you want tax breaks today

Guide: How to Maximize Retirement Savings

Contribute enough to get your employer match (free money!)

Diversify across stocks & bonds

Increase contributions as income grows

Rebalance annually

Trends in 2025

• Employers offering student loan repayment matching as an alternative to 401(k) contributions
• More retirement plans featuring ESG / sustainable investment options
• Growth in automated rebalancing via robo-advisors