Aside from 403(b) plans, what are the different kinds of tax-deferred investment vehicles?
New tax laws in recent years have increased the number of tax-deferred retirement accounts available. Because of the various rules governing eligibility, you should consult a professional tax advisor when deciding which of the following options best suits your situation. • 401(k) — You may make pretax contributions of up to $11,000 in 2002, in addition to a possible employer match. You earn compound interest. Applicable taxes must be paid when money is withdrawn, and there is generally a 10 percent penalty for early withdrawal (before 59½). • Traditional IRA — You may contribute up to $3,000 in 2002. Whether these contributions are tax deductible depends on whether you participate in a 401(k) and what your income level is. You earn compound interest. Applicable taxes are due when money is withdrawn, and there is generally a 10 percent penalty for early withdrawal (before 59½) of earnings and pretax contributions. • Roth IRA — You may contribute up to $3,000 in 2002 if your gross inc
