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.
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Related terms
A 401(k) for self-employed people with no employees. Allows both employee and employer contributions, supports Roth, and often beats a SEP IRA for max contribution room.
Contributing to a Traditional IRA then immediately converting to Roth. Used by high earners above the direct Roth IRA income limit.
The triple-tax-advantaged account: pre-tax contributions, tax-free growth, tax-free qualified withdrawals. FIRE folks treat it as a stealth retirement account.
A tax-advantaged account for education expenses. Contributions grow tax-free; qualified withdrawals are tax-free. Unused funds can now be rolled to a Roth IRA (up to $35K lifetime).
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