What are some tax-advantaged retirement plans?

Tax-advantaged retirement plans offer various tax benefits to individuals and can be a powerful way to save for retirement while minimizing your current tax liability. Here are some common tax-advantaged retirement plans in the United States:

1. 401(k) Plan:

   • Employer-sponsored retirement plan that allows employees to contribute a portion of their pre-tax salary to a retirement account. Contributions reduce current taxable income, and investment gains grow tax-deferred until withdrawal. Some employers also offer Roth 401(k) options, where contributions are after-tax, but qualified withdrawals are tax-free.

2. 403(b) Plan:

   • Similar to a 401(k) but available to employees of nonprofit organizations and certain public educational institutions. Contributions are typically made on a pre-tax basis, and growth is tax-deferred.

3. Traditional IRA (Individual Retirement Account):

   • An individual retirement account that allows you to make tax-deductible contributions, which reduce your current taxable income. Investment earnings grow tax-deferred until you make withdrawals in retirement. Withdrawals are subject to income tax.

4. Roth IRA:

   • Unlike a traditional IRA, contributions to a Roth IRA are not tax-deductible, but qualified withdrawals, including earnings, are tax-free. Roth IRAs also offer tax-free growth.

5. SEP-IRA (Simplified Employee Pension IRA):

   • A retirement plan for self-employed individuals and small business owners. Contributions are tax-deductible and grow tax-deferred until withdrawal.

6. SIMPLE IRA (Savings Incentive Match Plan for Employees IRA):

   • A retirement plan for small businesses with fewer than 100 employees. Both employers and employees can make tax-deductible contributions. Growth is tax-deferred, and withdrawals in retirement are subject to income tax.

7. Solo 401(k):

   • A retirement plan designed for self-employed individuals or business owners with no employees other than a spouse. It combines features of a traditional 401(k) and a profit-sharing plan, allowing for significant contributions.

8. 457(b) Plan:

   • A deferred compensation plan available to employees of state and local governments and some nonprofits. Contributions reduce taxable income, and earnings grow tax-deferred.

9. Thrift Savings Plan (TSP):

   • A retirement savings plan for federal employees and members of the uniformed services. It offers traditional and Roth options, and contributions can be made on a pre-tax or after-tax basis.

10. Annuities:

    • Annuities are insurance products that can be used for retirement planning. Some annuities offer tax-deferred growth, and qualified annuity withdrawals may receive favorable tax treatment.

11. Health Savings Account (HSA):

    • While primarily designed for healthcare expenses, an HSA can also serve as a retirement savings tool. Contributions are tax-deductible, growth is tax-free, and qualified withdrawals for medical expenses are tax-free. After age 65, non-medical withdrawals are subject to income tax but not a penalty.

12. Defined Benefit Plans:

    • These employer-sponsored retirement plans promise specific benefits in retirement, often based on salary and years of service. Contributions are typically made by the employer, and employees receive a fixed benefit at retirement.

13. Cash Balance Plans:

    • A type of defined benefit plan that combines elements of a traditional pension plan with features of a 401(k)-style plan. Contributions are made by the employer, and the account grows with a specified interest rate.

These tax-advantaged retirement plans can vary in terms of contribution limits, eligibility criteria, and rules, so it's important to understand the specifics of each plan and how they fit into your retirement strategy. Additionally, tax laws and regulations may change over time, so it's advisable to consult with a financial advisor or tax professional to make informed decisions about your retirement planning.