Simplified Employee Pension
(SEP) Plan: For self-employed people and small business owners who
wish to make tax-deductible contributions of their income and that of their
Simple IRA Plan: For firms of 100 or fewer employees to
establish an employee savings program for pre-tax contributions per year.
Defined Benefit Pension
Plan: For business owners who wish to contribute enough money each
year to provide a specific benefit upon retirement. This may be beneficial to
older employees with a high, stable income who need a rapid accumulation of
assets over a short period of time.
401(k) Plan: For employers who wish to allow employees to make
pre-tax contributions through payroll deductions of their pay.
Profit Sharing Plan
(Keogh** Plan): For business owners who wish to make tax-deductible
contributions of each participant's pay, and have vesting and loan schedules
not available with a SEP.
Money Purchase Pension Plan (Keogh** Pension Plan): For
business owners with predictable incomes who wish to make pre-determined tax-deductible
contributions of each Participant's pay.
Defined Benefit Plans
- Traditional pension plan with a stated annual benefit
you will receive at retirement usually based on salary and years of
- Benefit may also be defined based on a cash balance
formula in a hypothetical individual account (a cash balance plan).
- Maximum annual benefit can be up to $200,000 for 2012
($205,000 for 2013).
- Contributions are calculated by an actuary based on the
benefit you set and other factors (your age, expected returns on plan
investments, etc.); no other annual contribution limit applies.