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Hello everyone.
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Today we're going to be talking about retirement funds.
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So retirement funds are something that eligible taxpayers can contribute to in order to, you know, have money saved up for their retirement years.
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So we're going to look at two specific, well actually three specific ones, 401ks, and then roth iras and traditional iras.
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So let's start up with a 401k.
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Let's describe what a 401k is.
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So a 401k is.
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So a 401k, a 401k, is a retirement savings plan so retirement savings plan and essentially it's provided by the employer so provided by employer and how it works is that employees are allowed to save a portion of their salary before the tax are deducted and that money is put into a 401k and save for retirement so employees save part of salary of salary pre -tax and we see in some companies employers may match the contribution so let's say that a person is putting let's just say $200 out of their salary every month into their 401k the employer might match that $200 so now they have $400 per month going into that 401k plan the next type of retirement fund we're going to look at is is an ira.
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So i are a.
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Now there are many different types of iras.
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We have like roth iras, traditional iras, simple iras, sep iras.
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It's all different types.
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But essentially it's a way of investing.
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So it stands for individual retirement account.
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And it's a way for you to kind of invest your money.
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Invest money so that your money can be there when you're ready to attire and so you're able to earn and earn mark your funds for retirement now let's look at the difference between a traditional ira versus a roth ira now first and foremost with a traditional ira it's you contribute pre -tax dollars so pre -tax dollars and and additionally, your investments grow tax deferred.
02:59
So investments become tax deferred...