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.
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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.
An investment account with no tax advantages but no withdrawal restrictions. Essential bridge for early retirees who need to fund expenses before 59½.
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.
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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