The April 15 tax deadline has passed, and, for the majority of us, we do not think about tax planning in August. In actuality, this is the best time to do what you know you need to for your own retirement; hence, “Alphabet Soap.”E.R.I.S.A, 401(k), s401(k), 403(b), 412(i), 457, SEP-IRA, Defined Contribution Plans (DCP), Defined Benefit Plans (DBP), Keogh Retirement Account Plans, Individual Retirement Plans (IRAs), Roth-Individual Retirement Plans (Roth-IRAs) are just a sample of some of the retirement plans available. Usually, most readers have stopped reading after the first series of letters and numbers. Heads are spinning, and confusion reigns! That is why an article like this comes to life: to try and make sense out of what you may already have or may need and to move your retirement into reality.Starting with the basic premise that you would like to retire sometime in the future and would like to have sufficient dollars to be able to retire, then one of these plans maybe right for you. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for pension plans in private industry. An example would be if your employer maintains a pension plan – ERISA specifies when you must be allowed to become a participant, how long you have to work before you have a non-forfeitable interest in your pension and how long you can be away from your job before it might affect your benefits. ERISA also specifies whether your spouse has any rights to your pension in the event of your death. ERISA does not state that your employer must provide a pension or how much, if any, money they must contribute to it.Qualified or Non-Qualified: (a comparison)Qualified accounts are funded with dollars that have not been taxed as income.Non-Qualified accounts are funded with dollars that you have already paid income tax on.Which is the one best suited for your situation will depend on your goals and time frames. If you are employed, check to see if your employer has a plan. If they do, and you are not participating, you may be losing out on a significant employee benefit! If you are an employer, including a single person entity, and you would like more information, please contact my office.Next month: details on how much you can contribute and the common pitfalls to retirement plans.Donnell Services, LLC719-886-3377Registered RepresentativeSecurities America, Inc.Member NASD, SIPCwww.alexdonnell1.sarep.comDonnell Services, LLC, Securities America, Inc. are independent companies.
