Some popular retirement plans for employees include the 401k, Roth 401k and 403b, according to Bankrate. There are also some retirement plans specifically for individuals, such as deductible IRAs and SEP IRAs.Continue Reading
One of the most popular retirement plans is the 401k plan, which is often provided to employees, says Bankrate. The earnings through 401k plans are tax-deferred, meaning income does not get taxed when it is placed into the tax plan. Many employers also match or contribute a percentage of contributions for the employer-sponsored plans. Every year, there are contribution limits, though these often go up as the individual reaches 50 years of age.
For people employed by a nonprofit institution or school, the 403b retirement plan is available, notes Bankrate. The contributions are made with pretax dollars and can become tax-deferred. There are no income eligibility requirements, though people working less than 20 hours a week might not be approved for the plan.
Individuals that want a retirement plan not through an employer, there is the SEP IRA and Deductible IRA plan, according to Bankrate. The money invested in the SEP IRA plan is after tax, but it can become tax-free when it is withdrawn from the plan. There are contribution limits and some income eligibility requirements. The individual needs to be at least 59 1/2 years old before withdrawing unless she wants to pay a 10 percent penalty.Learn more about Financial Planning