Retirement Accounts

A 401(k) is an employer-sponsored retirement account. Traditional contributions can lower taxable income today, and withdrawals are taxed later. Contribution limits, catch-up rules, and plan features change by tax year, so verify the current IRS limits and your plan documents before acting.

A future tax bracket is not guaranteed to be lower. It depends on income, laws, location, account mix, and retirement timing. The useful idea is tax timing: Traditional accounts generally defer taxes, while Roth accounts generally pay taxes now for qualified tax-free withdrawals later.