Retirement accounts make it easier to reach our retirement goals. They provide some powerful benefits for long-term investing including tax advantages to make the most of our investment potential.
Retirement accounts allow us to buy investments that will grow faster than if we left our cash in a savings account or under our mattress.
The retirement accounts offered through our employer, usually either a 401(k) or 403(b), are great options. The names 401(k) and 403(b) refer to sections of the tax code set by the IRS.
Retirement accounts are excellent for long-term investing; however, they have rules that we need to keep in mind.
Many employers will match our 401(k) contributions, but that doesn't mean that we own that money right away. Sometimes we have to work at the company for a certain period before it's entirely ours. We call this vesting.