As physician families, sometimes it can feel like you’re constantly paying taxes. For as hard as you work, this can definitely be a drag. Luckily, when it comes to your retirement accounts, there is a way to grow your retirement money tax free, allowing you to keep a significant amount of your gains over the years.
Under current law, the government allows individuals to place their money into an account that grants their investments the ability to grow tax deferred or tax free depending on which account is set up. These accounts are called Individual Retirement Accounts, commonly referred to as an IRA.
There are two main types of IRA accounts: Traditional IRA accounts and Roth IRA accounts. While both accounts allow your investments to grow tax free from now up until you retire, they have some major differences that you should be aware of.
To learn more about IRAs and the differences between Traditional IRA accounts and Roth IRA accounts, please check out the full post at the Physician Wealth Services blog. Also, remember that regardless of which IRA plan you choose, make sure you take the initial step and actually open one up! Every source of income, whether it’s tax free or not, is important in retirement. The goal is to supplement your 401k and add to your retirement nest egg so you can achieve financial freedom quicker and retire when you want.