Types of Savings account as an employee

Type of Account	Description	Taxes on contributions?	Taxes on withdrawals (principal)?	Taxes on earnings?
401(k)	An employer-sponsored account into which you can save pre-tax money from every paycheck. In retirement, the money you withdraw—including earnings—will be taxed in whatever income bracket you’re in at the time.	No	Yes	Yes
403(b)	Operates almost exactly like a 401(k) plan, but is usually offered to those who work for public schools and tax-exempt organizations.	No	Yes	Yes
Traditional IRA	An Individual Retirement Account into which you can save money and receive a tax deduction if you meet certain income requirementsThe income limit is based on your modified adjusted gross income, which is based off your adjusted gross income. In 2012, if you're married filing jointly and your MAGI is less then $92,000, you can deduct your full IRA contribution. If your MAGI is between $92,000 and $112,000, you can deduct part of your contribution. If it's more than $112,000, you can't deduct any of your contribution. In 2012, if you file single, as head of household or married filing separately and your MAGI is less than $58,000, you can deduct your full IRA contribution. If your MAGI is between $58,000 and $68,000, you can deduct a partial amount. If it's more than $68,000, you can't deduct any of your contribution. or if you don’t have an employer-sponsored retirement plan—such as a 401(k)—available to you.	No	Yes	Yes
Nondeductible IRA	An Individual Retirement Account into which you can save money if you don’t meet the income requirements for a traditional IRA and you have an employer-sponsored retirement plan available to you. Your contributions to this plan are not deductible on your taxes, but that also means you won’t pay taxes on the money when you withdraw it in retirement. You will, however, pay taxes on any earnings.	Yes	No	Yes
Roth IRA	An Individual Retirement Account into which you can save after-tax money if you meet certain income requirements. In retirement, the money you withdraw—both your deposits and all of your earnings—is entirely tax free.	Yes	No	No
Roth 401(k)	An employer-sponsored account that allows you to contribute after-tax money to a 401(k). As in a Roth IRA, both your deposits and earnings can be withdrawn entirely tax-free in retirement. The key difference between a Roth IRA and a Roth 401(k) is that the contribution limit for Roth 401(k)s is significantly higher: In 2012, only $5,000 can be contributed to a Roth IRA, while $17,000 can be contributed to a Roth 401(k). Also, people of all incomes can contribute to a Roth 401(k).	Yes	No	No
529 College Savings Plan	An investment account into which you can save after-tax money toward college education costs. As long as the money is used for qualified education expenses, you don’t have to pay taxes on any of the earnings.	Yes	No	No
Taxable account	An account, such as a savings account or an investment account, that exists outside of your traditional retirement accounts. There is no limit to the amount of money you can contribute to these accounts every year, but you’ll owe taxes on any money you make in this account, in the form of earnings or capital gains. You might have this account at a bank or brokerage house.