Retirement Planning

Retirement accounts fall into two broad tax treatments: traditional accounts like a 401(k) or traditional IRA give a tax deduction on contributions now with withdrawals taxed later, while Roth accounts are funded with after-tax dollars so qualified withdrawals in retirement are tax-free — the better choice generally depends on whether your tax rate is likely to be higher now or in retirement. Employer 401(k) plans often include a matching contribution, commonly treated as an immediate, guaranteed return worth capturing before investing elsewhere. As retirement approaches, withdrawal strategy becomes as important as accumulation — sequencing which accounts to draw from first, and at what rate, to manage taxes and reduce the risk of outliving savings during a market downturn early in retirement.