With all of the different options out there for choosing the right retirement plan for you, the most important thing to remember is to invest in a qualified retirement account. This means that whichever plan you decide to go for, it has to meet all of the requirements of the Internal Revenue Code and, as a result, it will be subject to certain tax benefits. To do this, the plan must also be set up for the sole benefit of the employee and their beneficiaries.

Qualified retirement accounts fall into two categories: Defined Benefit Plans and Defined Contribution Plans. Within these two categories, there are further subdivisions: Pension Plans, Profit Sharing Plans, Money Purchase Plans, Stock Bonus Plans and Annuity Plans.

Particular qualified retirement accounts include: 401(k) plans, 403(b) plans, 457 plans, SIMPLE IRAs, SEP IRAs and Keough Plans.

Your start-up business is going swimmingly, but you’re having trouble attracting employees to take it to the next level.  Perhaps the problem is you’re not really offering the best retirement package to get those enthusiastic new people on board.  There are several options when you’re considering a small business retirement plan so you need to decide which one works best for your company and your employees.

Your first option would be an SEP IRA, which can be set up by any business owner or self-employed individual for anyone who has worked for them for 3 of the past 5 years and although the employee cannot contribute directly, the employer can contribute up to 25% of earnings on their behalf.

Next up, there’s the SIMPLE IRA, for companies with fewer than 100 employees.  Here, the employer or employee can contribute up to $10,500 plus an extra 3% of their salary.  The only real disadvantage to this plan is that if you have a higher salary and would like to contribute more, you are not able to.

Then, of course, there’s the good old 401(k) plan.  So long as your company has more than 25 employees, the 401(k) may not be as expensive as you thought to set up.  The principal advantage of the 401(k) is that employers and employees can defer up to $15,500 of their salary (or $20,500 if you are over 50).

Everyone dreams of being their own boss, not answering to anyone but him (or of course, her) self.  But once the initial thrill of being in charge of your own destiny, the reality sets in: “now I’ve got to take care of my own retirement”.  No more relying on your employer to make sure that you’re putting a little something away for your future, now you’ve got to do it for yourself.  So what are your options?

One option is an SEP (Simplified Employee Pension) IRA which means that you can put away up to 20% of your self-employment earnings into a traditional IRA

Another option available is the Solo 401(k) plan, also known as the Individual 401(k).  The advantage here is that you can contribute 100% of your first $15,500 of your self-employment earnings, and then 25% of anything over and above that.  However, be prepared that your bank may not know about it as the plan is only just becoming more popular.

Lastly, you have the option of a Keough plan.  A Keough plan is similar to an IRA, but is split into a Defined Contribution Plan and a Defined Benefit Plan.  With the first of these, you are allowed to contribute up to $30,000 a year, or 25% of your earnings.  However, this amount remains fixed for the duration of the plan.  With the second, you set a “benefit goal”, and make regular assessed payments based on what you have available, rather than a regular fixed payment.

We all dream of one day sitting out on the lake, sinking a few beers and waiting for that dream catch to bite, looking back on years of work and cherishing the fact that you don’t have to go back tomorrow.   It’s a beautiful dream, but we all know it’s not going to happen without proper planning.  So what are the different kinds of retirement plans available?

First up, we’ve got the 401(k) plan.  This is where an employer makes a salary deferral (or rather, reduction) on behalf of eligible employees (as long as the employee wants to of course!).  A possible problem for some with the 401(k) is that caps placed on the plan by the employer and/or regulations imposed by the IRS usually limit the percentage of an employee’s salary that can be deferred to the plan.

Next up, there’s the 403(b) plan.  To save a little time here, we should just point out that it’s very similar to the 401(k), but for employees of public schools and certain tax-exempt organizations.  As such, the same limitations apply to the 403(b) as the 401(k).

In addition to these, there’s what’s called a 457 plan.  This is much like the 401(k) and 403(b) in that deferral payments are made on behalf of employees.  The principal advantage of the 457 is that deferrals are not subject to a cap and assets are not taxed until they are distributed from the plan, although there is still a yearly limit imposed by the IRS.