Investing in the United States
Capital gains rates, retirement accounts and Social Security rules for long-term investors in the United States. Amounts in US dollars; every figure with its source and an as-of date.
Key figures
How gains are taxed
How a gain is taxed depends first on how long you held the asset. Sold within a year, the profit is ordinary income and taxed at the regular brackets of 10 % to 37 %. Held for more than a year, it is a long-term capital gain taxed at 0 %, 15 % or 20 % depending on taxable income; the example below assumes the 15 % bracket. Qualified dividends get the same preferential rates, interest does not. There is no allowance, but capital losses offset gains without limit and up to 3,000 $ a year of ordinary income, with the rest carried forward.
State income tax comes on top in most states. High earners pay the 3.8 % Net Investment Income Tax in addition. Inside a 401(k) or IRA, none of this applies until money is withdrawn — or, in a Roth account, not at all.
Pension
- Social Security pays the full benefit at 67 for everyone born in 1960 or later; claiming at 62 cuts it by up to 30 %, each year of deferral after full retirement age adds 8 % until age 70.
- Workplace plans such as the 401(k) and individual retirement accounts (IRAs) defer tax on contributions and growth; a Roth 401(k) or Roth IRA is funded with taxed money and pays out tax-free after age 59½ and five years.
- Under the law of July 2025 (Public Law 119-21), Trump Accounts for children open from July 2026: up to 5,000 $ a year, treated as a traditional IRA once the child turns 18.