The best retirement saving plan options in the market
Since jobs form a huge part of our lives, and with the ever-increasing salaries enabling us to buy things to our heart’s content, a retirement saving plan is an important factor that has a huge bearing on our lives post-retirement. With that in mind, the US government has by and large kept the retirement saving plans out of the arms of the taxmen. So, what is the best retirement saving plan? Here is a lowdown o some of the best options available:
- 401(k) or 403(b) retirement saving plan
This is offered by your employer, who is the one to ensure that this retirement fund keeps on going via monthly contributions. Usually, these contributions are deducted from your monthly salary beforehand and processed into your account. If you decide to change your company, you can rollover your account and keep the same retirement fund going. While 401(k) is available for only for profit companies, government employees and the ones working in non-profit organizations are entitled to the 403(b).
- Solo 401(k)
If you are self-employed, then as a sole proprietor, you can set up your own retirement saving plan via Solo 401(k) and make contributions as an employee and as an employer for up to $53,000 per year. In case you are a senior citizen, the sum you can contribute can be up to $59,000.
- SEP IRA
Used primarily for the self-employed and small business owners, SEP is an abbreviation for Simplified Employee Pension. As an employer, you can contribute up to 25 percent of the compensation or around $53,000, whichever is lesser. While it may seem similar to the 401(k) retirement saving plan, the difference lies in the simplicity in setting up a SEP IRA retirement saving plan. If you are the owner of a small business, then you must contribute to all the employees meeting the criteria.