When you talk about retirement, you also need to talk about how your taxes will play into your plans as these are a significant part of your expenses for most of your life.
Fortunately, you can minimize your tax bills through two retirement accounts and save for retirement early.
As advocates for the sustainability of small businesses and Maryland Minority Business, (MBE) at Macro Resource, Inc., let us list down the two tax accounts that you can utilize for a tax-free retirement plan. This includes:
- Tax-Deferred Retirement Accounts
These accounts allow you to defer your payments to a later date. This allows you to pay less tax in the current year than you would in the future and therefore get immediate tax benefits. Some common tax-deferred accounts include traditional IRAs and 401(k) plans.
- Tax-Exempt Retirement Accounts
These accounts provide future tax benefits in the form of tax-free withdrawals upon retirement. In turn, you cannot reap a tax benefit upon contribution. Some common tax-exempt accounts are Roth IRAs and Roth 401(k)s.
Which of the two accounts makes more sense to your situation? Enlist the help of our business consulting in Maryland to help you decide.
Let our consulting firm in Parkville, Maryland help you map out your current operational practices. With our consulting services, you can identify your opportunities and be on your way to growing your enterprise.