Retirement
Answers to retirement questions - 401(k)s, IRAs, Social Security, withdrawals, and planning ahead.
4 guides in this topic.
Where to start, and why in this order
Which account to use, then what it costs to take money out early, in rising order of how much trouble the question causes.
| Read | Guide | The question it answers | Format |
|---|---|---|---|
| 1 | How Does a Roth IRA Differ From a Traditional IRA? | It comes down to one question: tax now, or tax later? | Comparison table |
| 2 | Can You Really Withdraw Roth IRA Contributions Whenever You Want? | Regular contributions, conversions and earnings follow different withdrawal rules. | Rule and exceptions |
| 3 | Do I End Up Paying Taxes Twice If I Take Out a 401(k) Loan? | Repayment, a deemed distribution and a loan offset have different tax consequences. | Rule and exceptions |
| 4 | Selected Exceptions to the 10% Early Withdrawal Penalty: IRA and Workplace Plan Reference | Check account type, plan access, documentation and tax reporting before relying on an exception. | Rule and exceptions |
The account type decides the tax timing
Retirement accounts are not investments. They are wrappers around investments, and what the wrapper decides is when the tax is paid. Traditional accounts generally defer it to withdrawal. Roth accounts generally take it up front. Most of the confusion in this topic comes from arguing about which is better in the abstract, when the answer turns on a comparison of tax rates now and later that depends on facts about one household.
The order above starts there, then moves through the withdrawal rules in rising order of how much trouble they cause.
The rules that catch people
- Cashing out on a job change. A balance taken in cash at a job change is taxed and, before the qualifying age, generally carries the additional ten percent. It is the single most expensive routine mistake in this topic.
- Rolling a workplace plan into an IRA too early. The separation-from-service exception near age fifty-five is a workplace plan rule. Money moved into an IRA no longer has it, and that consequence is easy to miss.
- Assuming an exception applies to your account type. Several well-known exceptions exist for IRAs and not for workplace plans, or the reverse. The matrix guide above exists because that column is the one people get wrong.
What is deliberately not here
No fund selection, no target allocations, and no projections presented as outcomes. Contribution and income limits change and are not printed here as fixed figures; the guides point to the IRS pages that carry the current ones. This is general educational information, not personalized retirement advice.