Retirement Account Education
Understanding your 401(k), IRA, 403(b) & TSP
The short answer
These accounts are excellent for saving. But a large balance is not automatically a retirement plan — the important work is deciding how to turn it into income, manage taxes, and protect it as you approach retirement.
What each account is, briefly
- 401(k) / 403(b) — employer retirement plans (403(b) is common for schools and nonprofits). Contributions are usually pre-tax and grow tax-deferred.
- TSP — the Thrift Savings Plan for federal employees and the military.
- Traditional IRA — an individual account with tax-deferred growth.
- Roth IRA — funded with after-tax dollars; qualified withdrawals can be tax-free.
When you leave an employer, you generally have options
- Leave it in the old plan
- Roll it into a new employer’s plan
- Roll it into an IRA
- Cash out (often the least favorable due to taxes and penalties)
Each option has trade-offs around fees, investment choices, protection, and flexibility. There is no single right answer — it depends on your complete situation.
Official resource: IRS rules for rollovers are summarized at irs.gov/retirement-plans.
Have questions about your own situation? Tracy is glad to talk it through with you — clearly and without pressure.
Educational only. Not tax, legal, or investment advice. Rollover decisions have tax consequences; consult a qualified tax professional. Services offered only where Tracy is properly licensed.