- Retirement plans are constantly changing and beginning
modified. The following represents a brief list of the most popular
plans - Traditionally called - pensions, these plans which
are no longer offered by most companies. These plans
are characterized by the fact that employers contribute money and make
a binding promise that retired workers will receive income for the
rest of the lives based upon a defined formula. No employee
contributions were allowed and employers made investment decisions.
contributions plans - Commonly referred to as 401(K)
accounts,403(B) or TSA plans, profit sharing or ESOPs, these plans are
now commonly used as employers don't have a binding obligation to pay
any benefits. Employers and or employees make contributions into these
plans and employees generally monitor their own investments. Many
plans are optional and many have employer "matching"
retirement plans - The word "qualified" generally
refers to the tax-deferral advantage offered in most retirement plans
(taxes are deferred until you take the money out). Most plans such as
401(K) plans and other defined contribution plans are qualified.
Non-qualified plans are generally used to provide additional
retirement benefits to senior management or key employees. Unlike
401(K) plans, contributions are taxed immediately. Any earnings
associated with the contributions are tax-deferred so long as the
money remains in the plan.
Regardless of what plans your
company offers - make sure you are participating in all the ones you are
Your independent Fee-Only
financial adviser can help you determine how your retirement plans will
benefit your retirement planning.
Independent Adviser Corporation is a 100% Independent and 100% Objective
Financial Advisory Firm that writes buy-side investment research. Our
network of independent Fee-Only Financial Advisers serves individuals,
families and businesses. They provide financial planning services, tax
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