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Wondering which retirement accounts actually help your money grow over time? With so many options, Roth IRAs, 401(k)s, and even whole life insurance, it’s easy to feel overwhelmed. Each promises long-term growth, but not all deliver the same tax benefits or flexibility.
We understand that retirement planning can feel like a maze. You want your money to grow steadily while keeping more of what you earn. And the truth is, small intentional choices now can lead to huge results later.
At BetterWealth, we've helped people create retirement strategies that align with their values, not just financial formulas.
If you’re looking to build lasting wealth, it’s worth exploring options beyond traditional investments. Tools like overfunded whole life insurance can complement your other accounts while adding stability. Let’s explore how you can make your retirement plan work intentionally for your future.
In this blog, we will talk about:
Let’s break it all down and help you build a plan that actually fits your life.
Retirement accounts are tools designed to help your money grow while adhering to specific tax rules and usage guidelines. Knowing the basics, such as account types, tax benefits, and who can open what, makes it a lot easier to make informed choices.
Retirement accounts don’t just help you save for the future, they also come with powerful tax benefits that can boost your long-term growth.
Choosing the correct retirement account can mean keeping more of your money, either by lowering taxes today or enjoying tax-free income tomorrow.
There are a handful of retirement accounts most folks use:
Account Type
Key Feature
Contribution Limits (2025)
Tax Treatment
401(k)
Employer-sponsored
$23,000 annual + $7,500 catch-up (50+)
Tax-deferred growth, taxed on withdrawal
Traditional IRA
Individual Retirement Account
$6,000 annual + $1,000 catch-up (50+)
Tax-deferred, taxed on withdrawal
Roth IRA
Funded with after-tax money
Same as a Traditional IRA
Withdrawals are tax-free if the rules are met
SEP IRA
For self-employed/business owners
Up to 25% of income
Tax-deferred
What’s right for you depends on your job, income, and retirement goals. Some work accounts use pre-tax money, others use after-tax money that grows tax-free. It’s not exactly one-size-fits-all.
Not every account is available to everyone. Employer plans like 401(k)s usually require you to work for the company. Sometimes, there are age or service time requirements as well.
IRAs are easier to open, but Roth IRAs have income limits that kick in if you earn too much. And of course, there are annual limits; if you’re over 50, you can put in a bit more thanks to catch-up contributions. Figuring out what you’re eligible for helps you pick the accounts that actually make sense for you.
The right account can help your money grow without a lot of drama. Some offer tax perks, while others provide various investment options. Knowing what’s out there can really change how your retirement savings stack up.
A 401(k) lets you stash money from your paycheck before taxes hit, which lowers your taxable income. If your employer matches contributions, that’s basically free money; don’t leave it on the table. Your money grows tax-deferred, so you only pay taxes when you withdraw it.
You usually get to pick from a menu of investments (mostly stocks and bonds), so you can set your own risk level. The annual contribution cap is $23,000 in 2025, or $30,500 if you’re 50+. That’s a decent chunk if you’re trying to catch up.
Roth IRAs flip the script: you put in money you’ve already paid taxes on, but your withdrawals in retirement are tax-free. Super helpful if you think your taxes will go up later. No required minimum distributions are due at 73, so your money can continue to grow if you don’t need it yet.
You can withdraw your original contributions at any time, with no penalty. The annual limit is $6,500 in 2025, or $7,500 if you are 50 or older. High earners might not qualify, but there are workarounds, such as backdoor Roth IRAs.
Traditional IRAs let you save pre-tax money or get a tax deduction, depending on your income and whether you or your spouse has a 401(k). You pay taxes when you take money out in retirement. This works well if you want to lower your taxable income now.
Just remember, you’ll have to start taking money out at 73. Contribution limits are the same as Roth IRAs. Traditional IRAs let you invest in pretty much anything: stocks, bonds, mutual funds, you name it.
Picking the correct retirement account really comes down to how much you can put in, how taxes hit your money, and when you can actually use it. Each account has different rules that shape your long-term growth and flexibility.
Every retirement account has a cap on how much you can contribute. For 2025, IRAs allow you to contribute $6,500, or $7,500 if you’re 50 or older. 401(k)s have a much higher limit, $23,000, plus another $7,500 if you’re over 50.
The more you put in, the more your money can compound. Roth IRAs and Roth 401(k)s also have income limits, so not everyone can contribute directly.
Tax rules can really change how your money grows. Traditional IRAs and 401(k)s utilize pre-tax dollars, thereby lowering your taxable income in the present. You’ll pay taxes when you take money out in retirement.
Roth accounts? You pay taxes now, but withdrawals (including earnings) are tax-free later, as long as you follow the rules. It’s worth thinking about whether you want a tax break now or tax-free money later. That choice affects how your savings grow and how you can use them.
Understanding withdrawal rules helps you avoid unnecessary taxes and penalties while keeping your retirement strategy on track.
The investments you pick matter a lot. The right mix can help your savings grow without too many surprises. Spread your money around, keep fees low, and choose investments that shift as you get closer to retirement.
Diversification is just a fancy way of saying “don’t put all your eggs in one basket.” If one investment tanks, the others can help offset the loss. Diversify your investments in stocks, bonds, and cash to fine-tune your risk tolerance.
Stocks can grow fast but swing wildly. Bonds are steadier, but don’t grow as quickly. Having both helps protect your savings. You can even mix within those categories—different industries, different countries, whatever makes sense. Check in on your balance periodically. As retirement approaches, shifting toward safer investments can help you sleep at night.
Index funds and ETFs track a whole market, like the S&P 500. That means you get a slice of a lot of companies at once. They usually have lower fees than actively managed funds, so you keep more of your money.
Over time, those savings can really add up to higher long-term returns. They’re easy to buy and sell, and since they just aim to match the market, you can count on steady growth most years. Many people use them as the backbone of their retirement plan.
Target-date funds are the “set it and forget it” option. You select a fund with a year close to your planned retirement, and it automatically shifts from growth (stocks) to safety (bonds and cash) as you approach it. No need to rebalance yourself. Early on, it’s mostly stocks for growth, but it gets more conservative over time.
If you want something low-maintenance that still adapts to your timeline, target-date funds are a solid choice. For help with the trickier stuff, retirement accounts, tax moves, and more, you can always schedule a free Clarity Call with BetterWealth to get a plan that actually fits you.
Employer-sponsored retirement plans are a great way to build savings with some tax perks and (sometimes) free money from your job. The details vary a lot, so it’s worth knowing what each plan offers.
403(b) plans are primarily for folks working at public schools, nonprofits, or specific religious groups. You can set aside pre-tax money directly from your paycheck, reducing your taxable income. Your investments grow tax-deferred until you pull them out at retirement.
You’ll typically have mutual funds and annuities as investment options. Sometimes, employers even match your contributions; never turn down free money. Contribution limits for 2025 are $22,500, with a $7,500 catch-up if you’re 50+. If you withdraw money before age 59½, you’ll likely incur penalties and taxes.
If you work for a government agency or a specific type of nonprofit, you may have access to a 457(b) plan. Like a 403(b), you put in pre-tax dollars and let your money grow tax-free until withdrawal. Here’s the cool part: with a 457(b), you can take out your cash penalty-free as soon as you leave your job, even if you’re under 59½.
That flexibility is great if you plan to retire early or switch jobs. Limits are the same as those for 403(b) plans, $22,500 per year, with catch-up options. Just be aware of the fees and the investment menu, which can vary significantly.
Profit-sharing plans let your employer kick in a share of company profits to your retirement account. These contributions aren’t guaranteed; your employer decides each year whether and how much to contribute. Typically, this money is invested in a 401(k) or a similar retirement account, growing tax-deferred.
The amount can change every year, depending on the company's performance. Profit-sharing can give your retirement savings a boost, but don’t count on it alone. The 2025 limit for combined employee and employer contributions is $66,000 or 100% of your salary, whichever is less.
BetterWealth helps clients understand how these plans fit into the broader retirement picture. Schedule your free Clarity Call today to see what mix makes sense for you.
If you run your own business or work for yourself, you’ve got some flexible retirement options at your fingertips. These plans let you stash away more with higher contribution limits—and there are often some tax perks, too. Which one fits best? That depends on what you earn and how hands-on you want to be.
A SEP IRA is about as straightforward as it gets. If you're looking for a straightforward way to save, this is a solid choice. You can put in up to 25% of your net self-employment income, with a 2025 cap of $66,000.
Only the employer can contribute here, so if you’re the owner, it’s all on you. Your investments grow tax-deferred, and you get to choose where the money goes.
No annual filings are required; simply set it up and continue contributing. However, if you have employees, everyone eligible receives the same percentage. It’s best suited for solo owners or small teams.
SIMPLE IRAs suit businesses with up to 100 employees. Both you and your staff can contribute. For 2025, employees can save up to $15,500, with an extra $3,500 allowed if they’re over 50.
As the employer, you’ll either match employee contributions up to 3% of pay or contribute 2% for every eligible worker, regardless. It’s a plan that gets everyone involved in their own retirement.
Limits are slightly lower than those of SEP IRAs, but employees can participate directly. The money you and your team put in lowers your taxable income, and it grows tax-deferred. Plus, you skip the headache of annual filings.
Solo 401(k)s are built for business owners with no employees, except maybe a spouse. You get to contribute as both employee and employer.
For 2025, you can contribute up to $22,500 as an employee, and if you’re over 50, add a $7,500 catch-up contribution. As the boss, you can also throw in up to 25% of your pay, with a total cap of $66,000.
You can save more, and there’s even a loan option if you need it. There’s a bit more paperwork, to be sure, but if your goal is to build up your retirement truly, this plan makes sense. Solo 401(k)s also fit nicely with BetterWealth’s strategies for intentional wealth.
Picking a retirement account isn’t just about stashing money. The details matter—a lot. If you keep an eye on the right stuff, you’ll hang onto more of your cash and make your account work harder for you.
Fees can quietly erode your investment returns over time. Look at management fees, expense ratios, and any sneaky charges. Even a small fee makes a difference. A 1% annual fee on $100,000?
That’s $1,000 gone every year. Over the decades, it’s not pocket change. Try to find accounts with low fees but still solid service and investment options. Some plans let you see the fees up front so you can compare.
Vesting is just a fancy word for how long you need to stick around before you fully own employer contributions. If your plan has a long vesting period and you leave too soon, you might lose out on free money.
Schedules can go from instantly vested to three or five years. Knowing your vesting schedule helps you plan your next move. If you’re in it for the long haul, being vested means you keep those employer contributions.
Employer matches are basically free money for your retirement. Many plans match a percentage of your contribution, up to a set limit. A typical match might be 50% of what you put in, up to 6% of your pay. So, if you contribute 6%, your boss adds 3%.
Always try to contribute enough to get the whole match. Seriously, don’t leave that money sitting on the table. BetterWealth brings up matching a lot, and for good reason—it can make a huge difference in your retirement success.
Even minor missteps can derail your long-term goals. Here are the biggest pitfalls to watch out for, along with tips on how to avoid them.
Stay consistent, diversify wisely, and think long-term; those are the habits that turn saving into sustainable wealth.
Starting to save for retirement can feel overwhelming, but honestly, it’s not as daunting as it seems. The hardest part is just beginning; any amount helps, and compound interest does the rest.
Select a retirement account that suits your specific situation. You’ve got options: 401(k) through work, IRA, maybe even a Roth IRA. Each one comes with its own tax rules and withdrawal quirks, so choose what matches your income and plans.
Figure out how much you’ll need when you stop working. Set a monthly savings target based on that. If possible, automate your contributions to avoid skipping a month.
Retirement planning isn’t just about saving, either. You want to shield your money from taxes and inflation. That’s where strategies like overfunded whole life insurance come in. BetterWealth’s and Asset approach is all about growing your money while providing you with living benefits.
Here’s a quick starter list:
Taking these steps, even if imperfectly, helps you build a retirement fund that grows with you.
The “right” retirement account depends on your age, job, and goals. Each plan has its pros and cons, tax benefits, flexibility, and growth potential. Understanding the details helps you zero in on what’ll work for you over the long run.
For young adults, Roth IRAs and 401(k)s with employer matching contributions are typically the top choices. Roth IRAs grow tax-free, and you pay taxes now, which is excellent if you expect to earn more later. 401(k)s with matching give you a boost right away.
There's Traditional IRAs, Roth IRAs, and 401(k)s. Traditional IRAs and 401(k)s let you put off taxes until you withdraw. With Roth IRAs, you pay taxes now, but the growth is tax-free. 401(k)s tend to have higher contribution limits and sometimes employer matches, which IRAs don’t offer.
If you want tax breaks now, Traditional IRAs or 401(k)s lower your taxable income. If you wish to make tax-free withdrawals later, Roth IRAs are your friend. Employer plans, such as 401(k)s, also include extra money through matching contributions. If you’re self-employed, SEP IRAs and Solo 401(k)s let you contribute more.
At 30, focus on accounts that let your money compound for decades. A Roth IRA plus a 401(k) (if you have one) is a potent combo. Roth IRAs offer tax-free growth, and a 401(k) with matching gets you extra savings. Always try to get the full employer match first.
Some employers offer better matches and lower fees, which means your money goes further. Look for companies that contribute generously while keeping costs low in their 401(k) plans. You can also reach out to BetterWealth advisers for assistance in finding options that align with your goals.
If you’re self-employed, Solo 401(k)s and SEP IRAs come with higher contribution limits than traditional IRAs. With a Solo 401(k), you get to contribute as both the employer and the employee, which is honestly pretty great for building up your retirement savings faster and cutting down on taxes. Sometimes it feels overwhelming to choose the right plan, but BetterWealth can help you sort through the options and find something that actually aligns with your goals.
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