Types of Retirement Accounts to Retire Early

April 9, 2021 /
This is the header image for the Fiology Lesson Types of Retirement Accounts to Retire Early. It depicts a young girl at a chalkboard writing A B C D to indicate that someone is learning the basics of a topic.

What types of retirement accounts can you contribute to?

The types of retirement accounts you will use to achieve Financial Independence depends on what is available to you. Are you in the military? If so, you have the Blended Retirement System (BRS). Are you in the corporate world? If so, you likely have a 401(k) option. If you are a teacher or self employed, you have other options. 

There are different types of retirement accounts and we don’t have access to all of them, but most employees have the ability to initiate and contribute to a Traditional IRA and/or a Roth IRA.

It is important for us to determine what plans are available to us, discover how we can initiate them, and then take action in order to maximize their performance within our retirement planning. 

In this Fiology lesson, we will discover much of what we need to know about retirement accounts.

Types of retirement accounts include:

  • Roth IRA
  • Traditional IRA
  • SEP IRA, 401(k)
  • Solo 401(k)
  • 403(b)
  • SIMPLE IRA
  • Thrift Savings Plan
  • HSA
  • and more

It can be overwhelming. Once you determine what accounts are available to you, it’s recommended to focus on those, for now, to help avoid getting overwhelmed or confused. After spending some time learning about what you have available to you, take action.  Know what you are invested in and how much you have invested in each account.

Investing in these accounts can have many advantages that can support your Financial Independence journey.

Read:

Listen:

Watch:

Take Action:

  1. Visit the ultimate authority of the Types of Retirement Plans at the IRS.gov website. Again, for now, only focus on those accounts that you have determined are available to you. While simply hearing the term “IRS” usually brings tension, their website is a great resource. Click on a few links during your visit.
  2. If you already contribute to your 401(k) at least up to the amount to receive the maximum matching contributions, consider opening a Roth IRA or a Traditional IRA with Vanguard. Do your own research on investment options. A recommendation depends on the amount of funds you have available when you initiate your account. If you have $1K to invest, consider a Target Retirement Fund or VTI. If you have $3K or more to invest, consider VTSAX.  There are many comparable low-fee options offered by other fund companies. Please do your own research and invest only when you have educated yourself enough to be comfortable. If you have questions specific to your circumstance, please join the The Fiology Community Facebook Group and ask questions there. Each person’s situation is unique. Do not take the information on this page or the links associated as gospel or directive. Learn as much as you need to responsibly take positive action to achieve Financial Independence.

Note: If determining to invest between VTI or VTSAX, consider that you’ll have to manually make periodic purchases of VTI from within your Vanguard account. If you want to automate periodic purchases, then consider VTSAX. The underlying investments are nearly identical.

Additional Resources:

Depending on your chosen profession, you may have unique accounts available to you.

Types of Retirement Accounts for Military or Federal Employees

Retirement Accounts for Teachers, Nonprofit Employees, or Ministers

Retirement Accounts for Self Employed

Quote:

“The scariest moment is always just before you start.” – Stephen King

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David Baughier

My passion for helping others led to the curation Fiology. Help me spread the message of Financial Independence by clicking a colorful link above and sharing this post on your favorite social platform. Thank you!

3 Comments

  1. The Sunday Best (5/27/2018) - Physician on FIRE on May 27, 2018 at 7:57 am

    […] designed to help you find the answer to that question and many more. An article of mine appeared in Lesson 9: Retirement Account Basics. I encourage you to read them […]

    Reply
  2. Aaron Emberson on September 18, 2019 at 2:56 am

    Hello Fiology team!

    Thank you so much for this amazing resource on the route to Financial Independence! I’ve really enjoyed the lessons so far. 🙂
    I do have one question from reading the lesson 9 description.

    Being that I’m in Canada, are there resources that point more broadly into these savings account details? Or some resources you’d suggest for Canada specifically?

    Thank you a million times for such a Life changing resource!

    With gratitude,

    Aaron Emerson

    Reply
    • Fiology on September 18, 2019 at 1:18 pm

      Aaron,

      Thank you for the kind words and continued support. It makes me happy that you find value in Fiology. As far as your question. I personally have zero expertise or experience in Retirement Account Basics for Canada. I did post your comment in the Fiology Facebook Page and I am anticipating a few responses that point us in the right direction. If I get some good information, I’ll check it out and then forward it to you. Having said that, Pete aka Mr. Money Mustache of http://www.mrmoneymustache.com/ and Kristy and Bryce of https://www.millennial-revolution.com/ are either from Canada or are familiar. In the mean time, I’d check out their sites and use their search functions to determine of they’ve written anything on the subject specifically.

      Talk to you soon,

      Very Respectfully,

      David

      Reply

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