Tax Sheltered Accounts

Roth 401 (K)

A variation on the traditional 401(K) plan in which contributions are made with post-tax dollars, but capital gains and eventual withdrawals at retirement are not taxed.

401(K)

An employer-sponsored retirement account that allows employees to make pretax contributions to a retirement account usually with a contribution match plan from the employer. withdrawals at retirement are taxed as income.

IRA (Individual Retirement Account)

An investment tool individuals use to earmark and earn funds for retirement savings. Can contain a range of invesment vehicles including stocks, bonds, etf's, etc... contributions up to $5500 annually ($6500 when 50 years or older) are tax deductible and the IRS will not apply income tax to those revenues. At retirement withdraws from your IRA are taxed as income.

Do it Yourself "Discount" firms

Carry out investment orders at a cheap cost to clients, but do not offer investment advice, research, retirement planning, or other wealth management services. Examples: Charles Schwab, TD Ameritrade, Fidelity

Full Service Firm

Financial firm that offers customized support and interactions when facilitating trades, managing portfolios, financial planning, and other wealth management services. Usually have fees far higher than those of discount, "do-it-yourself" firms. Examples: Edward Jones, Raymond James, UBS, Merryl Lynch, Wells Fargo Advisors.

Roth IRA

Unlike a traditional IRA you contribute to a Roth IRA with after-tax dollars, however, capital gains are not taxed and when in retirement you do not incur income tax on withdrawals.

529 account

an account that offers tax advantages when saving for higher education. Funds can be used for tuition and other mandatory school expenses, (nothing where the primary use is entertainment), but not too pay off school loans. Usually has a state-mandated limit for contributions. If funds in the account are not used for education they are subject to taxes and a 10% penalty fee. Two Types Savings Plans: Similar to an IRA but for a plan-holder to invest long term at a tax advantage for a benificiaries future education. usually recommended to start investing in riskier equity securities and as the beneficiary comes closer to time of college move those funds to safer fixed income investments to reduce risk. Prepaid tuition plan: Allows a plan-holder to pre-pay tuition at a designated college at the current price of tuition. This shields plan-holders from inflation which is usually very high for college prices. If a student attends a school not on the designated​ lift they will have to cover the difference in the amount of the plan and the cost of that institution.