(Money Manager) - A 408(k) is a plan that allows employees of smaller companies and those who are self-employed to save money for retirement. Although many people think the 408(k) term is the actual name of a plan, it is really a term that describes an Internal Revenue Code. This code defines and details the Simplified Employee Pension account, which is commonly referred to as an SEP account. These plans allow individuals to contribute to a retirement plan account using their pre-tax dollars. The use of pre-tax instead of after-tax dollars can effectively reduce an employee's income for the year, which can result in significant tax savings for the individual.

Read the rest of this entry »

(Marcel Dupre) - If you are trying to take advantage of the down markets and you want to put away some money for your future, check out the Roth accounts. A Roth account can come in different forms as a Roth IRA, a Roth 401(k), and a Roth 403(b). Using a Roth is a no-brainer if you think tax rates will be higher in the future and your income will be the same or more later because in general, if you wait until retirement to take money out of a Roth, you won’t owe any taxes on your withdrawals.

Read the rest of this entry »

(Joe Lyons) - Roth retirement plans are one of the best wealth creation tools available. They are also one of the most underutilized. Simply stated, Roth's are accounts that are funded with after-tax money, which can grow tax-free as long as the account exists. The contribution limits are the same as for pre-tax accounts.

Read the rest of this entry »

(Money Manager) - A SEP IRA is a type of individual retirement account that has different tax rules than other types of IRA's. With a few exceptions, a SEP IRA is subject to the same rules as a Traditional IRA. One of the differences is that a SEP IRA is set up by an employer for employees, or for himself if he is self-employed. Traditional IRA's are not set up by employees. As a result, SEP IRA's have rules as to who is an eligible employee, employer contribution limits, and so forth. Self-employed individuals with no employees make up the bulk of those establishing this type of IRA, although some employers with employees do have SEP IRA's.

Read the rest of this entry »