Three things you didn’t know about retirement accounts.

[Jasz]

1. You can withdraw money from your retirement plan at any time without penalty

If you’re not yet retired, you can take money out of a 401(k) or IRA at any time without having to pay taxes or penalties. If you’re already retired, the same goes for traditional IRAs and Roth IRAs.

2. Your employer may match some of your contributions

Your company may contribute money to your 401(k) or other retirement account. That’s called a match and it can be up to 50% of your salary — but only if you participate in the plan. If you don’t participate, then only a portion of the match will apply to your contributions.

3. The value of any investments in your retirement accounts will increase over time

The more years you work at a company that sponsors a 401(k) or an IRA, the better those investments will perform over time (and vice versa). This is because each year that passes brings with it more experience and knowledge about how markets work, which in turn leads to better investment returns over time as people who have been working for decades get more experience with investing in stocks.

 

[symakhan]

1. Contributions to retirement accounts are typically tax deductible: Depending on the type of retirement account you open, contributions may be tax deductible. This means that the amount you contribute is subtracted from your taxable income for the year, reducing your overall taxes owed.
2. Withdrawals from retirement accounts often incur penalties: If you withdraw money from your retirement accounts before reaching retirement age, you may incur a hefty penalty. Depending on the type of account, this could be 10 percent or more of the amount withdrawn!

3. Investment options within retirement accounts vary: Not all retirement accounts are created equal. Some allow for greater flexibility in terms of investments than others.

 

[Yusra3]

If you're thinking about retiring, it's important to know that there are a few things you probably didn't know about retirement accounts.

But don't worry. Here are three things you didn't know about retirement accounts:

1. You can use your retirement account to invest in alternative assets. While traditional retirement accounts, such as 401(k)s and IRAs, are typically used to invest in stocks, bonds, and mutual funds, some retirement accounts, such as self-directed IRAs, allow you to invest in alternative assets such as real estate, precious metals, and private businesses.

2. You can borrow from your retirement account. Under certain circumstances, you may be able to borrow from your retirement account without incurring a penalty. For example, 401(k) plans may allow you to take a loan if you meet certain eligibility requirements, such as being a participant in the plan for a certain amount of time. However, it is important to be aware that if you default on the loan, you may be subject to tax consequences and may have to pay a 10% early withdrawal penalty if you are under the age of 59 1/2.

3. You may be able to contribute to multiple retirement accounts. Depending on your employment situation, you may be able to contribute to more than one retirement account. For example, you may be able to contribute to both a 401(k) plan through your employer and an IRA on your own. It is important to carefully consider the contribution limits and tax implications of contributing to multiple retirement accounts.