You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
An important part of tax planning when it comes to investing is considering the tax impact of accessing your investment funds. As you know, one of the key features of the traditional 401(k) retirement account is that you can contribute pre-tax dollars from your income, which then grow tax free until you need them.
You may know about Roth IRAs, but did you know that many employers now give retirement plan participants a Roth 401(k) option? Both traditional and Roth 401(k)s offer significant tax benefits for investors, but those benefits differ in ways that are important for you to understand.