Retirement Plans

  • Individual Retirement Plan

    Traditional IRAs

    Your earnings grow tax-deferred until withdrawn. You may qualify for a tax deduction on contributions if you are within certain household income limits.

    • Any person who has earned income through employment and who is under 70½.
    • A nonworking spouse under age 70½ who files a joint return that includes earned income.
    • Contribution Limits: For 2017:You can contribute the lesser of 100% of taxable compensation or $5,500 ($6,500 for individuals age 50 or over); or $11,000 for couples filing jointly ($13,000 if both age 50 or over).

    Rollover IRAs

    • If you're changing jobs or retiring, you can enjoy continued tax-deferred growth or a consolidation opportunity.
    • (A rollover of pretax savings from an employer plan to a traditional IRA is not a taxable event. A rollover of pretax savings to a Roth IRA is a taxable event.)

    Employer-Sponsored Retirement Plans


    Businesses with 100 or fewer employees, including state and local governments and tax-exempt organizations, are eligible for SIMPLE IRAs. A tax-deferred retirement plan designed specifically for small businesses.

    SEP Plans

    A SEP IRA is an easy, low-cost way for self-employed people and small business small-business owners to save for retirement on a tax-deferred basis.

    Contributions from the employer can vary or not be made at all, depending on profitability, cash flow or other factors. No participant contributions are allowed.

    401(k) Plans

    Any employer, except government entities, can offer a 401(k) plan. Each employee participating in the plan determines how much money is to be automatically contributed from each paycheck. Generally, participants can invest an annual maximum of $18,000 in 2017, or $24,000 for those 50 or older.

    • Traditional contributions (that is, not Roth contributions) are made before taxes are deducted, which means that income taxes are not paid at the time of investment. Instead, taxes are paid when the money is withdrawn, including on any earnings.
    • Plans may allow Roth contributions, which are made with money that has been taxed. Money that’s been taxed won’t be taxed again. Additionally, earnings are tax- and penalty-free for qualified distributions.
    Employer Contribution
    As an added incentive for their employees to invest, some employers make “matching” contributions to participant accounts. Some employers match employee contributions dollar for dollar, while others contribute a percentage of what employees contribute. Employers may also make discretionary contributions into participant accounts.

    403(b) Plans

    A 403(b) is a tax-favored retirement plan similar to a 401(k) plan, but designed for employees of school systems, nonprofit hospitals, religious organizations and other tax-exempt employers.

    Payroll Deduction IRAs

    Payroll deduction IRAs may be the simplest way workers can save for retirement. Employees set up a traditional or Roth IRA on their own, and then let the employer know how much they’d like to contribute from each paycheck.

    Defined Benefit Pension Plan

    For business owners who wish to contribute enough money each year to provide a specific benefit upon retirement. This may be beneficial to older employees with a high, stable income who need a rapid accumulation of assets over a short period of time.

    Profit Sharing Plan (Keogh** Plan)

    A profit-sharing plan, also known as a deferred profit-sharing plan or DPSP, is a plan that gives employees a share in the profits of a company. Under this type of plan, an employee receives a percentage of a company's profits based on its quarterly or annual earnings.


    Section 529 plans

    College savings plans, and prepaid tuition plans may offer tax advantages and, in some cases, the ability to pay in installments over a longer period of time. Note, monies from a 529 plan must be applied to qualified higher educational expenses related to college; otherwise, there could be adverse tax consequences to nonqualified withdrawals. Additionally, there could be state tax benefits for investing in your in-state 529 plan, if your state sponsors one.

    Coverdell Education Savings Plans

    With Coverdell Education Savings Accounts (formerly known as Educational IRAs), you can make contributions for each child, until he or she is 18.

    Money contributed to a Coverdell Education Savings Account may grow, tax-deferred, and may be withdrawn—free from federal income taxes—for any qualified higher educational expense incurred by the child before age 30. After that time, any remaining balance must be distributed to the beneficiary. Any gains will be taxed as ordinary income and will incur a 10% penalty tax. State taxes may also apply. The account owner can retain control of the money in the account, if desired. The beneficiary can even be renamed in some cases. Check the IRS website for current contribution limits.

    UGMA/UTMA Custodial Accounts

    These custodial accounts, which are named for the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfers to Minors Act (UTMA), let investors take advantage of the lower tax rate for children while saving for education. Check the IRS website for current contribution limits. Check with your tax advisor, prior to making any decisions.

    ** The term "Keogh" or "HR-10" describes any type of retirement plan established by an nincorporated business - whether it be a profit sharing, money purchase or defined benefit plan.