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Understanding the differences between the various tax-advantaged accounts canhelp you make informed financial decisions.
Annuities
Annuitiesare financial products designed to provide a steady stream of income.
You shouldnt consider buying one until at least your late fifties or early sixties.
Note that there are penalties for withdrawing funds from an IRA before you are age 59 1/2.
Roth IRA
Roth IRAsare contributions made with after-tax income, and withdrawals are tax-free in retirement.
They provide tax-free growth, and qualified withdrawals provide flexibility for tax planning in retirement.
Some states offer tax deductions or credits for contributing to your 529 Plan.
It can also be transferred between family members without penalties.
These accounts are meant for retirement savings, so they are also subject to early withdrawal penalties.
All of these options generally offer higher contribution limits as a business owner, as well as greater flexibility.
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