VIDEO: Want to retire? Let’s Talk Retirement Accounts!

Planning for the Future: When Retirement is Just Around the Corner.

Welcome to Practical Prosperity: Let’s Talk Retirement Accounts

Hi there! My name is Park, and welcome to Practical Prosperity—the place where we break down money topics in a simple and practical way.

In today’s post, we’re diving into something that’s crucial for your financial future: retirement accounts. If you’ve ever wondered what the differences are between a Roth IRA, a traditional IRA, and a 401(k), you’re in the right place.

The Top Retirement Accounts in the U.S.

When it comes to planning for retirement, three accounts dominate the conversation:

• Roth IRA

• Traditional IRA

• 401(k)

Let’s look at how each one works.

💸 Roth IRA

A Roth IRA is funded with after-tax dollars. That means you pay taxes on the money before it goes into the account. The big advantage? Once you hit retirement age (currently 65), your withdrawals—including any growth—are completely tax-free. That’s right: all that money is yours to keep.

💼 Traditional IRA

A traditional IRA is sort of the opposite. You contribute pre-tax dollars—so you may get a tax deduction in the year you contribute. But when you start taking money out at retirement, you’ll pay taxes on your withdrawals. It’s a "save now, pay later" model.

🏢 401(k)

A 401(k) is an employer-sponsored retirement plan. What makes it powerful is the option to choose between a traditional or Roth setup—and many companies also offer a matching contribution. That means your employer might match a percentage of what you contribute (like 4%) or match you dollar-for-dollar up to a certain amount. That’s essentially free money toward your retirement.

Which One Should You Choose?

The best choice depends on your current income, tax bracket, and your goals for retirement. But regardless of which you pick, the most important thing is to start. The earlier you contribute, the more time your money has to grow.

Thanks for tuning in to Practical Prosperity! Stay smart, invest wisely, and build a future you can be proud of. Until next time!