Investing for the Future
Investing for the Future
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Most companies, including Community Ambulance, offer enrollment (or autoenrollment upon hiring) into employee sponsored 401k plans. These plans offer employees the opportunity to allocate funds into their investment portfolio straight from their paycheck.
There are opportunities to invest in retirement plans outside of the employee sponsored 401(k) plans, this is referred to as an individualized retirement account (IRA).
Both IRAs and 401(k)s can be obtained through Roth options as well.
Below you will find a detailed breakdown of the differences between traditional IRAs and 401ks and their Roth counterparts, as well as descriptions of further investment options.
click on image for further information
(IRS, 2025; SCCU, n.d.)
Traditional IRA
An IRA is an individual retirement account
Need “earned income”
Tax deferred
you will not pay taxes on your contributions until you withdrawal the funds
withdrawal age 59.5
10% penalty if withdrawal early
Max limit on annual contributions to an IRA at $7,000*
Required minimum distribution starts at age 73
Traditional 401(k)
Employee sponsored program
Potential for employer matching
Tax deferred
you will not pay taxes on your contributions until you withdrawal the funds
Withdrawal age = 59.5
10% penalty if early
Max individual 401K contribution for 2025 - $23,500*
Required minimum distribution starts at age 73
What makes Roth different?
What makes Roth different?
Roth IRAs and Roth 401(k)s offer tax-free growth and withdrawals.
Both are funded with after-tax dollars
All earning grow tax-free
No required minimum distribution
5 Year Rule
to withdrawal earnings tax free and penalty free, must be 5 years from from the first contribution
Can withdrawal contributions at any time with no penalty, not earnings
Income limit: $146,000
What is the same?
Contributions limits are the same*
Withdrawal age = 59.5 (10% penalty applies)
*Max contribution limits change yearly.
Other ways to invest...
Other ways to invest...
Stocks
Stocks are buying a small share in a company.
Two ways to make money:
selling stocks at higher price than they were bought for
receiving dividends
(IRS, 2025)
Bonds
Bonds are an investment where you lend your money to a government entity or corporation
Issuer promises to pay at end of term
Low risk and returned compared to others
(IRS, 2025)
Mutual Funds
When a group pools money together to buy various stocks/bonds/investments.
Managed by a professional and can make money in three ways:
Dividends/interest from investments
Selling shares in fund at higher price
Receiving capital gains distribution
(IRS, 2025)
Index Funds
Very similar to mutual funds but are passively managed.
Passively managed means there is no professional, trade goes off of the index.
The index is a tool to quickly measure the stock performance for the day
(IRS, 2025)
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