Retirement Plans

Employee Stock Ownership Plans

What is an Employee Stock Ownership Plan - ESOP ?

An employee stock ownership plan, or ESOP for short, is a stock bonus plan that invests corporate profits back into the stock of sponsoring employer by rewarding employees with company stock.  An ESOP is a qualified plan and therefore, provides special tax benefits

Fixed Amortization Method

What is the Fixed Amortization Method?

The fixed amortization method of determining substantially equal periodic payments is probably the most popular method out of the three available.  Its popularity stems from the fact that it is simple to calculate and also creat

Required Minimum Distribution Method

What is Required Minimum Distribution?

The Required minimum distribution method is a simple way of calculating substantially equal periodic payments and is one that resets every year.  It is basically calculated by dividing your retirement account balance b

Substantially Equal Periodic Payments

We discussed the various exceptions to the early distribution penalties and of those, substantially equal periodic payments (SEPP) needs its own article due to its complexity.  Substantially equal periodic payments allows the participant the opportunity to withdraw funds

Taking Loans From Retirement Plans

Under what Circumstances can I take a Loan from a Qualified Plan?

Taking a loan from a qualified plan such as a 401(k) or employee stock ownership plan is allowe

Beneficiary

What is a Beneficiary?

A beneficiary is a receipient of your assets upon your death.  Many believe that setting up a will and naming beneficiaries in there is enough to properly transfer assets at the time of your death; however, this is not true.  It is extremely important to understand the limits of a will.  Just because you name a beneficiary on y

Avoiding Early Distribution Tax

What is Early Distribution Tax On Retirement Plans?

To prevent investors from depleting their retirement savings, the IRS imposes a penalty of 10% for making any withdrawals or distributions from your retirement plans before you reach the age of 59.5.  There are, however, exceptions to every rule it seems when it comes to the tax code.  With this article, we will cov

Income Tax Rules for Retirement Plans

Income Tax Rules for Retirement Plans

For those of you who participate in retirement plans such as 401(k), 403(b), Roth IRA,

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    • 403b Plans

    What is a 403(b) Retirement plan?

    A 403(b), also known as a tax deferred annuity or TDA, is a tax deferred retirement plan available to employees of public schools, tax-exempt organizations, employees of public schools which are organized by Indian Tribal governments, civilian faculty and staff of the Uninformed Services University of H

    Roth IRA

    What is a Roth IRA?

    Simple IRA

    What is a Simple IRA?

    Simple IRAs, or also referred to as simplified incentive match plan, are designed to make it easier for small businesses of less than 100 people to offer retirement plan benefits.  Similar to a 401(k), the SIMPLE IRA allows pre-tax deductions to be made from employee accounts. 

    Simplified Employee Pension - SEP

    What is a Simplified Empoyee Pension (SEP)?

    A SEP, or simplified employee pension, is a special form of an IRA which is designed for small businesses to allow a high rate of tax deferred savings.  Under a SEP, each participant has an account set up to which the employer contributes to.  These contributions are not part of the employees' s

    Rollover IRA

    What is a Rollover IRA?

    A rollover IRA is a special type of IRA that is used to receive distributions from an employer sponsored qualified plan such as the 401(k) or

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    • Traditional IRA

    What is a Traditional IRA?

    A traditional IRA is an investment vehicle for retirement that allows you to contribute after-tax dollars to a tax deferred account on which you will not pay taxes on until you begin taking distributions at retirement; presumably in a lower tax bracket.

    Keogh Plans

    What is a Keogh Retirement Plan?

    A keogh plan is a qualified plan designed to help self-employed workers or individuals establish a tax-deferred retirement savings vehicle.  A keogh can be established as a

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