Retirement Plans
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"Strategic retirement planning has become increasingly critical in today’s dynamic financial landscape. We have collaborated with seasoned financial experts to provide tailored guidance, ensuring you select the most appropriate retirement options to meet your long-term objectives."
Individual Retirement Plans
In the United States, several retirement plans are available, designed to help individuals save for their post-work years. These plans can be employer-sponsored, individually managed, or government-backed. Here’s a detailed overview of the most common retirement plans:
Traditional IRA (Individual Retirement Account)
Individually Managed Plan
Overview: A Traditional IRA is an individual retirement account that allows tax-deferred savings. Individuals open and manage their own IRAs without employer involvement.
Tax Benefits: Contributions may be tax-deductible, depending on income and participation in other retirement plans. Withdrawals are taxed as income.
Contribution Limits: In 2024, individuals can contribute up to $7,000, or $8,000 if they’re 50 or older.
Withdrawal Rules: Withdrawals before age 59½ typically incur a 10% penalty plus taxes.
SEP IRA (Simplified Employee Pension IRA)
For Small Business Owners and Self-Employed
Overview: The SEP IRA allows small business owners and the self-employed to contribute to their own retirement, and also to provide retirement savings for their employees.
Tax Benefits: Contributions are tax-deductible for employers, and investments grow tax-deferred until withdrawal.
Contribution Limits: Employers can contribute up to 25% of an employee’s compensation or $66,000 (2024 limit), whichever is lower.
Withdrawal Rules: Similar to traditional IRAs, with penalties for withdrawals before age 59½
For Self-Employed Individuals
Overview: A Solo 401(k) is for business owners without full-time employees (except for a spouse). It functions like a 401(k) but is tailored for individuals or small businesses.
Tax Benefits: Contributions are tax-deferred, and distributions are taxed as income.
Contribution Limits: The individual can contribute as both employer and employee, with combined limits up to $66,000 (2024), plus $7,500 in catch-up contributions for those 50 or older.
Roth Option: Many Solo 401(k) plans offer a Roth option, allowing after-tax contributions and tax-free withdrawals.
Solo 401(k)
Individually Managed Plan
Overview: A Roth IRA is another individual retirement account, but unlike Traditional IRAs, contributions are made with after-tax income, meaning there is no immediate tax deduction.
Tax Benefits: Withdrawals in retirement are tax-free, including both contributions and investment earnings, as long as the account is held for at least five years and the individual is 59½ or older.
Contribution Limits: $7,000 for 2024 ($8,000 if over 50), with income-based eligibility limits.
Unique Feature: No required minimum distributions (RMDs) during the account holder’s lifetime, and early withdrawals of contributions (but not earnings) are tax- and penalty-free.
Roth IRA
Supplemental Retirement Plans
403(B) Plans
For Nonprofit and Educational Employees
Overview: Similar to a 401(k), the 403(b) plan is available to employees of nonprofit organizations, schools, and certain government entities.
Tax Benefits: Contributions are tax-deferred, and withdrawals are taxed in retirement.
Employer Contributions: Many organizations offer matching contributions.
Contribution Limits: The same as 401(k) plans: $23,000 for 2024, plus $7,500 in catch-up contributions for those over 50.
457(B) Plans
Government and Nonprofit Employees
Overview: A 457(b) plan is offered to state and local government employees, as well as some nonprofits. It works similarly to a 401(k) but with different withdrawal rules.
Tax Benefits: Contributions are tax-deferred, and withdrawals are taxed in retirement.
Contribution Limits: The contribution limit is $23,000 for 2024, plus a $7,500 catch-up contribution for employees over 50.
Unique Feature: 457(b) plans do not impose the early withdrawal penalty before age 59½, unlike 401(k) and 403(b) plans.
Let The Experts Handle It
Navigating the complexities of selecting the appropriate medical plan can be daunting. Our team of experts is dedicated to streamlining the process, ensuring a smooth experience while identifying the optimal plan tailored to your unique needs and financial considerations.
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