from Florida Realtor Magazine, March 2008 | page 33

Types of Retirement Plans
Here are brief descriptions of the most popular retirement accounts, each of which has more detailed rules. Please consult your financial advisor for more information.

• Individual Retirement Arrangement (IRA). This allows individuals to set aside money each year, reducing taxable income. Earnings are tax-deferred until withdrawals begin at age 59 1/2 or later.

• Roth Individual Retirement Arrangement (Roth IRA).  Taxes are paid on individual contributions, but earnings grow tax free and withdrawals are generally not taxed.

• Simplified Employee Pension Individual Retirement Arrangement (SEP IRA). Designed for the self-employed or owners of small companies, this account allows individuals to defer taxes on contributions until retirement.

• 401(k). A defined-contribution plan offered by a company, which allows employees to make tax-deferred contributions for retirement; in some cases employers match those contributions.

• Individual 401(k), sometimes called a solo 401(k) or a uni-401(k) plan. This plans is designed for one-owner businesses and requires far less paperwork than a traditional 401(k).