1. 401 (k) Plan

Actually increases your take home pay. You will pay less on your tax bill. Some companies offer a financial match; usually between $ 0.25 and $1.00; Whatever you put in they might match you dollar for dollar. Ask your employer for additional information on the packages available to you and your options.

 

2. Employee profit sharing plans (EPSP)

This plan has been around for a long time but has grown in popularity over the last few years. Current legislation states that EPSP holders do not need to pay CPP or EL; that is usually deducted from the employees paychecks. For this plan you will need to file an annual 5500 form. For further information go to references,' listed below.

 

3. Stock bonus plan

A. Stocks, bonds, and cash in your portfolio package gives you leverage. Stocks have been essential over the long term. Excellent for growth and capitol over a length of time. Stocks puts you in a position of having some ownership of the company. There are a variation of stocks, each with gains and losses. It's a chance you take for possible gain in the long run.

 

B. With Bonds you have a portion of ownership of the business. The income produced through Bonds is a fixed amount; therefore making it a trusted source of financial benefit over the long range of time. The pitfall with Bonds is in the interest rate change.

 

C. Cash protects a portfolio used as a short term savings tool, with like money market securities. Investments with cash can be used to protect your portfolio; depending on our economy with interest rates it can be hard on your stocks and bonds. Balancing all three in your portfolio is the best decision for your future benefits.

 

4. Money Purchase Pension Plans

This choice is a fix rate you will pay into no matter what financial burdens befall you. This is a good choice for those that are in the higher range income bracket. That have a comfortable stable income. 25% of your salary or less will be contributed to your pension plan. Tip: An option is to freeze the plan and transfer it into your profit sharing plan. The combination plan would still allow for the most max contribution needed and lower your annual plan.

 

5. Simplified Employee Pension/ (SEP) plans

This is a plan that small businesses use for their employees. Allows for a contribution of up to 25% of your paycheck. Also is a good source of income for retirement. It is tax deductible and you may be eligible for a tax credit.

 

6. Savings Incentive Match Plans/ (SIMPLE) plans

It is a simple plan for small business owners. This plan is not subjected to the complicated qualification requirements like the other tax qualified plans for the employers. Your contributions are based on you making at least 5,000 a year. Employers have to contribute by usually matching dollar for dollar or up to 3% of the employee's contribution. Self employed people are eligible for this plan too.

 

7. Roth IRA Plan

 

Roth IRA combined with the 401 (k) plan; was a new plan that took shape in January 1, 2006; offered to employees as a combination package . Of both Roth IRA and traditional 401k plans. This plan is for employees, or self employed individuals who contribute to their post-tax funds for their retirement accounts. Roth IRA is also a tax free distribution plan. For lower income individuals the Roth IRA plan would be preferable. If you can get the combination package it would be the best choice. The 401 (k) plan is portable too.

 

8. Social Security Investment

In 1998 The Social Security Administration reported that it will pay out less than a quarter of what you will need to survive on upon your retirement. It is important therefore to invest in other packages for security. It is up to you to take the steps necessary to save and choose a plan that will work for you. Most of the plans allow access in case of an emergency but the best choice for that would be to have emergency money in a savings account at a branch of your choice for personal financial emergencies; so you aren't dipping into your retirement money. For more information on S.S. check references below.

 

9. Thrift Savings Plan/ (TSP)

This package deal is for federal government employees and members of the uniformed services. It is similar to the 401 (k) plan. You are able to decide what amount of income you want to add to your retirement account and the money will be deducted from your salary/paycheck. Tax benefits are also available with this package. If you change employers you will remain ownership of your retirement account. This plan also allows employers to match dollar for dollar if they choose too. (The employer could choose to contribute less to your package.) Inquire to your employer for further information about how much they will contribute to your package. Further information is listed below in references.

 

10. IRA Plans

With 5 different IRA plans to choose from: the traditional IRA, Education IRA, Roth IRA, Simple IRA, Simplified Employee Pension - (SEP) IRA. An IRA plan is an individual savings plan for retirement that provides income tax incentives. For more information checkout references listed below.

 

 

*401 (k) plan, or Roth IRA plan

Depending on your income 401k and Roth IRA are similar but vary in important areas. If you have an employee matching dollar for dollar in your retirement plan then it would be a good choice. Roth IRA is a better choice if Your employer isn't making an employee contribution match. Roth IRA plan is for the employees or self employed who contributed their post-tax funds to their retirement fund. Roth IRA also allows for tax-free growth and distribution; but the contributions to the account must continue for a length of 5 years. Your employer might offer this plan. For further information checkout:

 

*401 (k) Plan, or Pension

 

401 (k) plans is a popular choice with employers and employees. Many have replaced their defined benefit pension plans with 401(k) plans; because the pension plans were designed for employers that stayed with an employer for 20 to 30 years. For further information checkout our reference section listed below.

 

 

REFERENCES:

 

EMPLOYMENT PROFIT SHARING PLANS (EPSP)
http://www.drache.com/pdf/Drache_EPSPpresentation0108.pdf

INTERNAL REVENUE SERVICE
Money Purchase Pension plans/ Stock bonus plan/Thrift Savings plan or (TSP)/Roth IRA plan/Pension Plan http://www.irs.gov/retirement/article/0,id=108949,00.html