# Tax Savings Plans

**Published by:** [jelca thinks](https://paragraph.com/@jess/)
**Published on:** 2022-02-16
**Categories:** investing, hobbies
**URL:** https://paragraph.com/@jess/tax-savings-plans

## Content

401k (Retirement Plan Through Employer)With your employerPre-tax contributionsDeducted from payroll$20.5k annual limit (revised up from $19.5k)Limited in investment options (mutual funds)Penalties if withdrawn before age 59.5Roth IRA (Retirement Plan When You're Young or Making Under a Certain Income Limit)6k per year annual limit if under age 50Post tax contributionsIncome limit (129k if single). Penalty if you contribute too much or over this income.Withdrawals after age 59.5 tax freeRegular IRA (Regular Retirement Plan)6k annual limitPost tax contributionsNon deductibleFreedom to choose anything to invest inPenalties if withdrawn before age 59.5Withdrawals are deferred tax (whatever income tax bracket you are at when you're over 59.5)Rollover IRA (When You Change Jobs)Roll over your old 401k from a previous employer into a rollover IRAInstead of being limited in investments, you can now invest in anythingPre tax contributionsAmount in the plan is only what you rolled over from a previous employer, cannot contribute more separatelyPenalties if withdrawn before age 59.5Withdrawals are deferred tax (whatever income tax bracket you are at when you're over 59.5)529 Plan (Education)Can be for yourself or for your kid - can change beneficiaryCan open multiple plansCan choose which state you want to doNY plan: 5k deductible per year. If you leave NY, then you lose this benefitContribute post taxNo upper annual limitUp to 16k considered a gift, from a tax POVGains and withdrawals are tax free IF it is for education onlyTake note of upfront fees, deferred fees, and management fees / operational fees2022 Best PlansIndividual Investment/Brokerage Account (For Fucking Around)Post tax contributionsGains and withdrawals are taxable especially be careful with short term gains (day trading)Can invest in anything, wheneverE.g. Wealthfront, Robinhood, FidelitySeries I Savings Bonds (Inflation Hedge)Subject to federal tax, exempt from state and local taxWithdrawals for qualified education expenses are federally taxableAnnual interest rate linked one part fixed one part to inflation. Inflation adjusts every 6 months according to CPIMinimum hold 1 yearRedeem before 5 years = forego last 3 months interestBuy here, up to 10k annuallySeries EE BondsGuarantees 2x principal in 20 years~3.5% annual returnFederal tax exempt if withdrawals are for educationHSA (Healthcare Spending Account)Enroll through your employer during an open enrollment periodPre-tax contributionsCan only withdraw for medical expenses not paid by your high deductible health insurance policyFunds rollover year to yearCan withdraw post age 65 for non medical expenses, will owe income taxAnnual contribution limits of $3,650 (2022, it changes annually)Period products count too!!!Employers can contribute to HSAFSA (Flexible Spending Account)Pre-tax contributionsEmployers cannot contribute to FSAConsider FSA if you do not have a high deductible health planFSA funds do not roll overCannot have both unless you have an HSA and LPFSA (dental and vision)Check annual contribution limitsCrypto (For Really Fucking Around)Coinbase, Gemini, Binance, etc.Yield farmingHigh yield interest accounts like Gemini EarnEverything at your own riskPotential to lose everything you invest, and more.Investing with Your CompanyIf you can lever up that would be nice too

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