Ask a CFP® – Foundational Questions Edition: Account Types Series

Welcome to the first post in our new Ask a CFP® – Foundational Questions Edition blog series, where we answer the personal finance questions people are often afraid to ask out loud.

One topic that consistently comes up is: What types of investment accounts are out there—and which one is right for me?

Understanding the benefits of each one is a foundational step toward confident financial decision-making.

Over the coming weeks, we’ll tackle these common questions:

1. What’s a 401(k)

2. What’s an IRA?

3. What’s the difference between a Traditional and a Roth account?

4. What’s a taxable brokerage account?

5. Bonus Question: Should I invest in a 401(k)/IRA/Roth IRA or an index fund?

While there are many types of accounts out there, we’ll focus primarily on the three most common categories we see in practice:

·       Employer retirement accounts (like 401(k)s, 403(b)s, and 401(a)s—including both Traditional and Roth options)

·       IRAs (Traditional IRAs and Roth IRAs)

·       Taxable brokerage accounts (sometimes called “non-qualified” accounts)

Each of these has its own set of advantages and tradeoffs, especially in areas like:

·       Potential tax benefits

·       Contribution limits

·       Access and eligibility based on your employment situation

Your unique circumstances will determine which accounts might be best for you. We’ll aim to highlight the common reasons someone might choose one account type over another, and how each might fit into a long-term, tax-efficient investment strategy.

So, if you’ve ever wondered:

·       How your 401(k) works

·       Which types of accounts might be available to you

·       How to build long-term tax efficiency…

This series is a great place to start.

We’ll kick things off next week with: “What’s a 401(k)?”. Stay tuned!