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Our experienced advisors will serve as a knowledgeable sounding board to assist in helping you plan and set the course for your retirement goals. Please take a moment to view our website (click here for articles, newsletters, and calculators) as a precursor for questions or concerns we will be pleased to help you tackle.
Furthermore, you will see as you continue reading, there is a vast number of retirement plans available:
Employer Plans
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401k - a self-directed, qualified retirement plan established by an employer to provide future retirement benefits for employees that have pre-tax contributions, but is also available for individuals as Roth 401(k) which uses after-tax contributions.
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403b - similar to a 401(k) and is referred to as a tax-sheltered annuity, but is available to employees of public school systems and 501(c)(3) organizations (certain non-profit organizations. Roth 403b plans are also available.
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SEP IRA - known as a “Simplified Employee Pension” plan, is a deferred-compensation arrangement that is similar to a profit-sharing plan. It is available to self-employed individuals as well as employers. Contributions are on a nondiscriminatory basis to IRAs maintained by employees, and employers receive tax deductions for plan contributions.
- SIMPLE IRA – is an employer-sponsored retirement plan for small businesses, and functions as a Savings Incentive Match Plan for Employees of small employers, which is easy to set up and administer, allowing the employers to take a tax deduction of contributions made.
Top Hat Plans
Top Hat Plans consist of nonqualified retirement plans limited to a select group of key employees and are exempt from ERISA regulations.
- 457b - Unlike other retirement plans, the assets in a 457(b) plan do not belong to the individual but essentially represent a promise from the employer to you, the account holder. This is almost certainly fine for employees of large state universities, but could become an issue at a small non-government employer. As of 2002, an individual may contribute to a 457(b) plan and another plan, such as a 401(k) or a 403(b) plan, at the same time, and put the maximum amount allowed into both plans.
- 457f – another type of vehicle providing additional retirement income for nonprofit organization executives. There are no limits on the amount of deferred compensation that can be provided under this plan, and it fails to satisfy one or more of the requirements of Section 457(b).
- Split Dollar – an arrangement between the employer and a select key employee to join in the purchase of permanent life insurance. Policy premiums, death benefits and sometimes cash values are divided or “split” between the employer and key employee in accordance with the needs and objectives of each.
Individual Plans
- Traditional IRA – a simple tax-deferred savings account set up through an investment institution with such investing options as stocks, bonds, mutual funds, cash equivalents, real estate, to name a few. One of the benefits of a traditional IRA is the potential for tax-deductible contributions, however eligibility is based upon being an active participant in a qualified workplace retirement plan, and your IRA deduction may be reduced or eliminated based on your income.
- Roth IRA – differs from traditional IRAs in that taxpayers cannot deduct contributions made to a Roth IRA. However, qualified Roth IRA distributions during retirement are free of federal income tax and are not included in taxpayer’s gross income, which greatly benefits retirees already in a higher tax bracket. In addition, Roth IRA account owners can withdraw earnings penalty-free for qualifying higher-education expenses, but the deductions would be subject to ordinary income tax.
- Non-Deductible IRA - a Traditional IRA in which you do not get any upfront tax breaks on your contributions, but you do not pay any taxes on those distributions during retirement, similar to a Roth IRA, except that until now, high-income earners have not been allowed to directly invest in a Roth IRA.
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