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- Roth: You pay taxes upfront, but qualified withdrawals during retirement are tax-free, making it advantageous if you expect to be in a higher tax bracket later.
Choosing between them depends on your current income, expected future income, and tax outlook.
Key Differences in Retirement Plans
Who Offers What?
401(k): Exclusive to private sector companies; employer matches are common.
403(b): For public sector and non-profit employees; typically no employer match.
457(b): For governmental employees and emergency responders; offers unique early withdrawal benefits.
Early Withdrawals and Penalties
- 457(b) plans**: Allow penalty-free withdrawals before age 59½.