9 Tax-Advantaged Investments & Accounts to Build Wealth [2021]

Tax-advantaged accounts hold your tax-advantaged investments while regular taxable brokerage accounts can hold tax exempt investments (or tax-free investments) that do not require you to pay any taxes on income or gains.

1

Typically, 401(k) savings plans come from large, for-profit businesses who offer them to their eligible employees. These employees choose a tax-deferred contribution amount that follows that particular employer’s investment options.

Traditional 401(k) Plans

2

Both 403(b) plans and 457 plans have very similar features to 401(k) plans. The difference is that 403(b) plans are for employees of non-profit, tax-exempt business, such as schools, churches, or hospitals.

403(b) Plans & 457 Plans

3

A traditional Individual Retirement Account (IRA) is a tax-deferred investment account available through numerous brokerages and investing services. As long as you are younger than 72, you can deduct contributions on your tax return the year you contribute to the account.

Traditional IRA

4

The main difference between a traditional 401(k) and a Roth 401(k) is that a Roth 401(k) is tax-deferred rather than giving you a benefit the year you contribute.

Roth 401(k), 403(b), 457 Plans

Swipe up for more of THE 9 Tax-Advantaged Investments & Accounts to Build Wealth [2021]