A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Roth ConversionMoving money from a pre-tax retirement account into a Roth account and paying the taxes now for tax-free growth later.
- Roth IRAA retirement account funded with after-tax money that grows and comes out tax-free.
- Traditional IRAA retirement account where you often deduct contributions now and pay taxes later when you withdraw the money.
- Contribution LimitThe maximum amount the government lets you put into a retirement account in a single year.
- Tax-Deferred GrowthInvestment gains that build up untaxed inside a retirement account until you withdraw the money later.
- Excess ContributionMoney added to a retirement account above the yearly limit, which can trigger a penalty until you remove it.
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Plain-English education — not personalized legal, tax, or investment advice.