Tax-Advantaged Accounts

Tax-advantaged accounts are financial accounts that offer special tax benefits to encourage saving and investing for specific reasons such as retirement, education, or healthcare. These benefits can include tax deductions (e.g., pre-tax contributions), tax-deferred growth (no taxes until withdrawal), and/or tax-free withdrawals. Some types of tax-advantaged accounts include:

  1. Achieving a Better Life Experience (ABLE) accounts for qualified disability expenses.
  2. Education Savings Accounts such as 529 Plans for qualified educational expenses; and
  3. Health Savings Accounts (HSAs) for qualified medical expenses;
  4. Retirement accounts such as traditional and Roth 401(k)s and Individual Retirement Accounts (IRAs); and
  5. Trump Accounts (an account for minors intended to facilitate early investment).

For additional information on the rules and tax consequences of these accounts, please consult a tax professional. 

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