Social Security is not enough: How to set up alternative retirement income

James Royal, Ph.D., on

Published in Business News

5 accounts to use for retirement income

Retirement savers have five key accounts for building income, often with tax advantages that can help them build wealth faster, though you may have access to other top retirement plans.


The 401(k) is an employer-sponsored account that allows you to invest in potentially high-return assets such as stocks and stock funds. With a 401(k) you’ll avoid taxes on any earnings while the money is in the account. Then when you withdraw the money in retirement, after age 59 ½, you’ll pay taxes in the traditional 401(k) while avoiding them completely in the Roth 401(k).

For public sector employees, the equivalent of the 401(k) is the 403(b) program.



An IRA is an account open to any working American even if they already have another plan. An IRA lets you invest in an even wider selection of potentially high-return assets such as stocks, stock funds, bonds and many other securities. With an IRA you can avoid taxes on earnings while the money is in the account. When you withdraw money in retirement, at age 59 ½ or later, you’ll pay taxes on money from the traditional IRA and avoid them fully in the Roth IRA.

Brokerage account

Even a regular, after-tax brokerage account can help you amass money for retirement, though the account itself doesn’t offer any ket tax advantages. Still, you can invest in potentially high-return securities such as stocks and stocks funds. You’ll owe taxes on any dividends you receive in the account, though you won’t owe taxes on your capital gains until you sell the security. That means you could hold investments for decades and not owe capital gains taxes.



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