Tax-advantaged retirement plans and IRAs are designed to help you save for retirement while receiving specific tax benefits along the way. This guide summarizes the main plan types, annual limits, required withdrawals, and common “life event” situations like rollovers and hardship withdrawals.
The main types of retirement plans you’ll run into
Retirement savings generally fall into two buckets:
1) IRAs
Individual Retirement Arrangements (IRAs) let you save for retirement through traditional or Roth accounts.
2) Workplace and small-business plans
Common plan types include:
- 401(k) plans
- SEP plans
- SIMPLE IRA plans
Contribution limits (the “how much can I put in?” question)
Annual contribution limits can change from year to year. For example, for 2026, the employee 401(k) contribution limit increased to $24,500, and the IRA limit increased to $7,500.
Because limits update over time, it’s smart to confirm the current-year limit before you finalize your savings plan.
Required minimum distributions (RMDs)
An RMD is the minimum amount you may have to withdraw each year from certain retirement accounts once you reach the required age—described as “after age 72” in the overview materials.
There are tools available to help calculate the amount.
Life events: what to do when things change
Retirement planning isn’t just about contributions—real life happens. Common situations include:
- Hardship distributions, early withdrawals, and loans
- Rollovers (moving money from one plan/account to another)
- Changes in your life that affect employment, income, or retirement timing
Rollovers: moving retirement money without causing a tax mess
When you move retirement money, the method matters. In general, “rollovers” are a key category of guidance for handling job changes and consolidating accounts.
A common pitfall is taking money paid out to you instead of using a direct transfer—because withholding and deadlines can apply depending on the type of account and distribution.
Plan administration (for employers and plan sponsors)
If you operate a retirement plan, there are resources focused on maintaining it properly, including:
- Correcting plan errors
- IRS examination (audit) information
- Reporting and disclosure requirements
- Determination/opinion/advisory letter processes
- Actuarial and interest rate tables for benefit calculations