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Learning Center

Types of Retirement Accounts

Understanding Retirement Accounts

Saving for retirement doesn’t have to be complicated—but it does require the right tools. Retirement accounts allow you to grow your savings tax-deferred or tax-free, helping you build long-term financial stability. While Social Security and a 401(k) are common, they’re often not enough on their own. Fortunately, there are multiple retirement accounts you can use together to reach your goals.

Popular Retirement Account Types

Traditional IRA

Contributions are made with pre-tax dollars. You may qualify for a tax deduction, and your investments grow tax-deferred. Taxes are paid only when you withdraw in retirement.

Roth IRA

Funded with after-tax dollars. Contributions aren’t deductible, but qualified withdrawals in retirement are entirely tax-free—ideal for long-term growth.

401(k)

An employer-sponsored plan funded with pre-tax dollars. Many employers offer contribution matching. Taxes are deferred until withdrawals begin, typically after age 59½.

SEP IRA (Simplified Employee Pension)

Designed for self-employed individuals or small business owners. Offers high contribution limits and is funded with pre-tax dollars, similar to a traditional IRA.

SIMPLE IRA

A retirement savings plan for small businesses and self-employed workers. Contributions are tax-deductible, and investments grow tax-deferred until retirement.

TSP (Thrift Savings Plan)

Created for federal employees and military service members. Offers both traditional (pre-tax) and Roth (after-tax) options.

403(b)

A tax-sheltered annuity plan available to public school employees, nonprofits, and some religious institutions. Functions similarly to a 401(k).

457(b)

Available to certain government and non-government employees. Contributions can be pre-tax or Roth, with no early withdrawal penalty for separation from service.

Pension Plans

Defined benefit plans that provide a fixed monthly payment during retirement. Benefits are typically based on years of service and salary history. Withdrawals are taxable.

What Is a Rollover IRA?

When you change jobs or retire, you can move funds from your 401(k) into a Rollover IRA—without triggering taxes or penalties. This helps preserve your savings while giving you more flexibility in how you invest.

Rolling over to a traditional IRA keeps your funds tax-deferred. If you choose to roll into a Roth IRA, you’ll owe taxes on the transfer—but enjoy tax-free withdrawals down the line.

Need help rolling over into a precious metals IRA? Speak with a Senior Portfolio Manager at American Alternative Assets for a personalized strategy.

Traditional IRA vs. Roth IRA at a Glance

Feature

Tax Benefits

Tax on Earnings

Contribution Limits

Withdrawal Rules

Required Minimum Distributions (RMDs

Traditional IRA

Contributions may be tax-deductible
Taxed upon withdrawal
$7,000 (under 50), $8,000 (50+)
Taxed; penalty if under 59½
Yes, starting at age 73

Roth IRA

Contributions are not deductible
Tax-free if qualified
Same as Traditional IRA
Tax-free if qualified; penalty possible if early
No, if you're the original account owner

IRA vs. 401(k): Key Differences

401(k) plans were introduced by the Revenue Act of 1978 to help workers save through deferred compensation. They’ve since become one of the most common retirement vehicles, especially when paired with employer matching.

IRAs, by contrast, are individual accounts not tied to employment. Anyone with earned income can open one, and they offer a wide range of investment options, including physical assets like gold—something most 401(k)s don’t allow.

Want to diversify with gold? Contact American Alternative Assets to explore how a Gold IRA can fit into your retirement plan.

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