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 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.
- Backdoor RothA method high earners use to fund a Roth IRA by contributing to a traditional IRA first, then converting it.
- Tax-Deferred GrowthInvestment gains that build up untaxed inside a retirement account until you withdraw the money later.
- Required Minimum Distribution (RMD)The minimum amount you are required to withdraw from certain retirement accounts each year once you reach a set age.
- RolloverMoving money from one retirement account to another, such as a 401k into an IRA, without triggering taxes.
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Plain-English education — not personalized legal, tax, or investment advice.