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However, no one can get every decision right, and even the richest people have their big mistakes.
She also offered advice on how tomake sure it doesnt happen to you.
Retirement Accounts
Ormans mistake relates to how she managed her retirement accounts.
When saving for retirement, you’re able to choose to contribute to different types of accounts.
Knowing the differences is important to help you make the right choice.
401(k)
A 401(k) is a retirement plan for company employees.
As of 2024, you’re free to contribute up to $23,000 annually.
Your employer usually invests your funds and they grow tax-free until you withdraw them in retirement.
Because youve deposited pre-taxed income, you must pay taxes on your withdrawals.
First, you contribute to Roth IRAs with after-tax funds.
However, you dont need to pay taxes when you withdraw from a Roth account in retirement.
Second, the IRS allows you to leave your funds in your Roth IRA as long as you wish.
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