Fortify Financial

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Do you know the main advantages and purpose for each type?

Bank checking - liquidity and transacting

High yield savings - liquidity and yield, generally also principal protection (FDIC coverage if you use a bank program and do not exceed coverage limits)… an alternative to this account type is a money market fund but these are generally not FDIC insured

Non-qualified brokerage - after-tax investing with no contribution maximums or income limits on contributing (regardless of other retirement accounts… example: if you max out your 401k, you can still invest in this type of account)

Traditional IRA - tax deferred investing… especially important for anyone that doesn’t already participate in a 401k, 403b, 401a, SIMPLE, SEP, etc. No income limits to contribute, but there are income limits for deductible contributions, limits on the amount you can contribute, and when you can withdraw without a penalty.

Roth IRA - after tax investing with NO TAX on investment earnings and growth. 🎉 Like traditional IRAs, there are limits on contribution amounts and when you can withdraw without a penalty. There are also INCOME limits on who is eligible to contribute, but a conversion is an option if you exceed these amounts (phaseouts start at $146,000 for single filers and $230,000 for MFJ).

For more info on limitations, go to:
https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000

This content is for informational purposes and should not be taken as individual investment advice, nor should it be construed as an advertisement in states in which we are not registered. Please see important disclosure information at www.fortify.financial