Retirement Plan Types:

Defined Contribution Plan:
A retirement plan providing an individual account for each participant. The participant's benefit is the balance in the account, which changes over time, based on the amounts contributed, plus or minus any gains or losses in investments. The employer chooses whether or not participants direct the investment of their accounts.

Profit Sharing Plan:
A type of retirement plan under which an employer may, under the terms of the plan, make fixed or discretionary contributions. These contributions are subject to limits set by the Internal Revenue Code and may be -- but are not required to be -- tied to profits.

401(k) Plan
A 401(k) plan is a profit sharing plan that allows employees to make pretax employee contributions into an account under the plan. The plan may also include an employer match of all or a portion of an employee's contributions, as well as a standard profit sharing contribution.

Money Purchase Plan
A type of retirement plan under which an employer agrees to make mandatory contributions annually. Generally, contributions are based on a specified percentage of each participant's compensation.

403(b) Plan
A 403(b) plan is a retirement plan offered by a 501(c)(3) organization or certain educational institutions, which allows employees to make employee contributions into an account under the plan.

401K plan descriptions:

• A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on post and/or pre-tax basis. Employers may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit sharing feature to the plan. Earnings accrue on a tax-deferred basis.

• A 401k plan is a retirement plan sponsored by employers. Employees may choose to have a portion of their salary deferred to any of the 401k investment choices selected by the employer. The employer may also contribute to the employee’s 401k by matching a portion of the investment (for example, $.50 for every .00 the employee invests). The investments to which money is deferred may include stocks, bonds, money market funds, and company stocks

Your Retirement Options:
When you start thinking about retiring, also start thinking about what you plan to do once you retire. Are you going to pursue a hobby, travel, volunteer, work? Just sitting around waiting to die shouldn’t be an option. Once you retire, you’re going to have lots of free time so you need to prepare your self mentally and emotionally to handle this time.
Start your planning by making a list of your interests and your goals. Prioritize this list with what is most important first. You might want to come up with a list of about 1000 things you want to do before you die. I’d probably put things like wrestling an alligator or running with the bulls at the bottom of the list. Remember, with today’s life expectancy you will probably be retired as long as or longer than you were working. If you have a spouse or partner, be sure to inform him or her of your intentions and your list. If they are also retired, make a combined list. If they are still working, you might have to compromise on when you will do some of the things on your list.
Retirement used to mean sitting on the porch in a rocking chair and waiting for death to come calling. A person who retired was too old for any meaningful interaction and senility was expected. We’ve come a long way! Now retired persons are starting second and third careers, traveling non-stop, and are enjoying excellent health. Your retirement plan needs to include lifestyle plans as well as financial plans. Get your mind and your bank account ready for the fun.
Contact our office to learn about the many different retirement options that are available.