Series 7

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Retirement Accounts - Introduction

Retirement accounts can be individual or employer-sponsored. In either case, they are designed to allow investments in your client's pension to grow until retirement.
  • Usually, the money invested in a retirement account is deductible from income for tax purposes: if your client earns $100,000 per year and puts $3,000 in a pension plan, then she is taxed as if her income were $97,000.

  • Furthermore, all capital gains that accrue and all dividends that are reinvested are tax-deferred. That does not mean they are tax-free, but it does mean she does not have to pay taxes until she withdraws money from the account. However, she is likely to be in a lower tax bracket as a retiree than she is now that she is still a wage earner.
The Retirement Plans feature is your gateway to tutorials that are each devoted to one the most common retirement plans, explaining how to establish, fund, and then take distributions from it.
Individual Retirement Accounts (IRAs)
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