Choosing the right retirement plan depends on your career, the size of your employer, and your personal financial goals. With several different plans available, it’s important to understand how each one works to find the best fit for your retirement needs.
403(b) Plan
This retirement plan is designed for employees of public schools and certain tax-exempt organizations. This IRS resource offers detailed guidance on how to choose, participate in, and maintain a 403(b) plan, as well as how employers can contribute. It’s an ideal option for educators and non-profit workers looking to build retirement savings.
IRC 403(b) Tax-Sheltered Annuity Plans | IRS.gov
SIMPLE IRA Plan
A SIMPLE IRA is a great option for small employers and their employees. This IRS guide covers how to establish, participate in, and maintain a SIMPLE IRA plan, making it an excellent starting point for businesses without an existing retirement plan.
SEP Plan
Designed for businesses of any size, including self-employed individuals, a SEP plan allows employers to contribute to traditional IRAs for their employees. This IRS resource explains how to choose and operate SEP plans.
Simplified Employee Pension Plan (SEP) | IRS.gov
SARSEP Plan
Though no longer available for new enrollees, SARSEP plans are still maintained by some employers. This IRS guide provides information on how to participate in and maintain a SARSEP, including any necessary amendments for current law changes. It’s a valuable resource for businesses that established a SARSEP before 1997 and are continuing to operate it.
Salary Reduction Simplified Employee Pension Plan (SARSEP) | IRS.gov
Governmental Plans under Internal Revenue Code Section 401(a)
Governmental plans under IRC Section 401(a) are established by the U.S. government, states, or tribal governments. This IRS resource explains how these plans work, who qualifies, and what to consider when managing such a plan. It’s especially helpful for employees of governmental agencies seeking stable, long-term retirement benefits.
Governmental Plans Under Internal Revenue Code Section 401(a) | IRS.gov
IRC 457(b) Deferred Compensation Plans
A 457(b) plan allows employees of state and local governments and tax-exempt organizations to defer taxation on retirement contributions until they are withdrawn. This IRS guide explains how 457(b) plans work, including tax advantages, contribution limits, and eligibility. It’s a useful option for those working in government or non-profit sectors looking for tax-deferred savings opportunities.
