What is a tax-advantaged account?

“Tax-advantaged” is a broad term covering investment, savings, and other types of financial accounts that offer tax benefits. Common examples are individual retirement accounts (IRAs) or 401 (k)s, but certain municipal bonds, partnerships, and annuities also fit the bill. Tax-advantaged accounts can lower your tax liability.

Are tax-advantaged accounts a good investment?

Investing in tax-advantaged accounts can significantly impact an investor's overall financial health, leading to more substantial retirement savings and reduced tax burdens. These accounts offer tax benefits such as tax deductions, deferrals, or exemptions, making them a tax-efficient investment option.

What are the different types of tax-advantaged accounts?

Various tax-advantaged accounts cater to different financial goals and situations. Some common account types include Individual Retirement Accounts (IRAs), employer-sponsored retirement plans, Health Savings Accounts (HSAs), and education savings accounts. Fee-only financial advisors are paid a set fee for their services.