Accounts & TaxFIRE glossary
Defined termSEP IRA
A self-employed retirement account that lets you contribute up to 25% of net self-employment income ($69,000 cap in 2026). Simple to open; no Roth option.
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Related terms
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Qualified Dividend
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.
Mega Backdoor Roth
If your 401(k) plan allows after-tax contributions and in-service conversions, you can stuff up to ~$46K/year extra into Roth accounts. The holy grail for high-income FIRE seekers.
529 Plan
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).
401(k)
Employer-sponsored retirement account. Contributions are pre-tax (traditional) or post-tax (Roth). Look for employer match — that's free money.
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