The yearly, monthly, or weekly amounts you save in your account.
If your employer offers a retirement plan (like a 401(k) or 403(b) plan) and will match your contributions up to a certain percentage, make sure you get the full amount of free money that's available to you.
A type of account created by the IRS that offers tax benefits when you use it to save for retirement.
A type of IRA that allows you to make after-tax contributions (so you don't get an immediate tax deduction) and then withdraw money in retirement tax-free as long as you meet the requirements.
A type of investment with characteristics of both mutual funds and individual stocks. ETFs are professionally managed and typically diversified, like mutual funds, but they can be bought and sold at any point during the trading day using straightforward or sophisticated strategies.
A type of investment that pools shareholder money and invests it in a variety of securities. Each investor owns shares of the fund and can buy or sell these shares at any time. Mutual funds are typically more diversified, low-cost, and convenient than investing in individual securities, and they're professionally managed.
It's great if you can save more than what's needed to get the maximum company match in your employer plan.
Opening an IRA for your additional savings will give you a chance to shop around. You can hold many types of investments in an IRA, including any mutual fund, ETF, stock, or bond—many of which might cost less than those offered through your employer plan.
And you can use a Roth IRA to save money that won't be subject to taxes in retirement—an option that isn't available in many employer plans.
The 2023 annual contribution limit for IRAs is $6,500 for most people, although it depends on your income. (If you're age 50 or over, you can contribute up to $7,500.)
GOOD TO KNOW
If you have an employer-sponsored plan from a previous job, rolling it over to an IRA can give you additional flexibility and make your portfolio easier to manage.
After you've saved up to the match in your employer plan and maxed out your IRA, go back to your employer plan. The 2023 annual limit for employee contributions is $22,500 ($30,000 if you're age 50 or older and your plan allows catch-up contributions.)
Income you can receive by investing in bonds or cash investments. The investment's interest rate is specified when it's issued.
The distribution of the interest or income produced by a mutual fund's holdings to the fund's shareholders.
Contributions you can subtract from your income on your tax return, resulting in a lower tax bill.
For most people who want to save even more, the next step is to save in a general investment account.
These accounts won't have the tax breaks associated with retirement accounts, so you'll have to pay investment taxes on interest, dividends, and capital gains as your account grows, and you won't receive any tax deductions for your contributions.
We offer several types of accounts you can use to save for retirement. Figure out which one is right for you.
See how to juggle multiple financial goals
See contribution limits for various types of retirement plans
We offer expert help at the low cost you'd expect from Vanguard.
Talk with one of our investment specialists
Call 1-855-850-6972
Monday through Friday
8 a.m. to 8 p.m., Eastern time
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Talk with one of our investment specialists
Call 1-800-231-2364
Monday through Friday
8 a.m. to 8 p.m., Eastern time
Ready to start?
All investing is subject to risk, including the possible loss of the money you invest.
When taking IRA or employer plan withdrawals before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.
Neither Vanguard nor its financial advisors provide tax and/or legal advice. This information is general and educational in nature and should not be considered tax and/or legal advice. We recommend you consult a tax and/or legal adviser about your individual situation.
For more information about Vanguard funds or ETFs, visit vanguard.com to obtain a prospectus or, if available, a summary prospectus. Investment objectives, risks, charges, expenses, and other important information about a fund are contained in the prospectus; read and consider it carefully before investing.
Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.
The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.
VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.
