Operating Your 401(k)

In the US, the 401(k) is the primary retirement investment vehicle most of us have to work with. There are other vehicles, like IRAs, Roth IRAs, SEP-IRAs, and more, and those all work similarly. Essentially, you stick money in them (tax-free in the case of all but Roths), invest that money, and then let it grow. You’re limited in how much you can put in per year (differs by vehicle type and your age), and once you hit retirement age, you can begin withdrawing it. In most cases, you must start taking mandatory minimum withdrawal amounts past a certain age. Withdrawing money early from these is often subject to immediate income taxation as well as penalties of around 10%; some vehicles do offer exceptions for loans made from the account, such as loans for a first home or for a college education. Exceptions require that loans be paid back on a specific schedule, or you’ll hit taxes and penalties. <a href="https://medium.com/adultingforadults/operating-your-401-k-313808f593c9">Read More</a>