A deferred-comp retirement account for state/local government and some non-profit employees. Key feature: no 10% early-withdrawal penalty after separating from service — making it the FIRE hacker's secret weapon.
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Related terms
Employer-sponsored retirement account. Contributions are pre-tax (traditional) or post-tax (Roth). Look for employer match — that's free money.
Individual Retirement Account where you contribute post-tax dollars and withdrawals in retirement are tax-free. 2026 limit: $7,000/year ($8,000 if 50+).
A dividend taxed at long-term capital gains rates (0%, 15%, or 20%) instead of ordinary income. Must meet holding-period requirements — most U.S. stock fund dividends qualify.
IRA where contributions are tax-deductible today, but withdrawals in retirement are taxed as income.
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