I more or less understand that Traditional IRAs and 401ks are tax sheltered on the front end and that Roth IRAs are tax sheltered on the back end, but I’d like some more clarification on what that means.
Imagine I have $100,000 in a Roth IRA. If I withdraw all $100,000 of it, does it get taxed as income? Or do I only have to pay capital gains tax?
What if I repeat the same situation with a Traditional IRA? A brokerage account? And do any of these taxes get reduced/eliminated if they’re being used for a first time home purchase?