Basic Investing 401(k) Plan A qualified plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on a pretax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis. Contributions up to $17,000 / yr ; > 50 additional $5, (b) Plan A 403(b) plan, also known as a tax-sheltered annuity (TSA) plan, is a retirement plan for certain employees of public schools, employees of certain tax-exempt organizations and certain ministers. Individual accounts in a 403(b) plan can be any of the following types: - An annuity contract, which is provided through an insurance company. - A custodial account, which is invested in mutual funds. - A retirement income account set up for church employees. Contributions up to $17,000 / yr ; > 50 additional $5,500 Generally, retirement income accounts can invest in either annuities or mutual funds.

Basic Investing Individual Retirement Account - IRA An investing tool used by individuals to earn and earmark funds for retirement savings. There are several types of IRAs: Traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs. Traditional and Roth IRAs are established by individual taxpayers, who are allowed to contribute 100% of compensation (self-employment income for sole proprietors and partners) up to a set maximum dollar amount. Contributions to the Traditional IRA may be tax deductible depending on the taxpayer's income, tax filing status and coverage by an employer-sponsored retirement plan. Roth IRA contributions are not tax-deductible. SEPs and SIMPLEs are retirement plans established by employers. Individual participant contributions are made to SEP IRAs and SIMPLE IRAs. Also referred to as "individual retirement arrangements."

Basic Investing Roth IRA An individual retirement plan that bears many similarities to the traditional IRA, but contributions are not tax deductible and qualified distributions are tax free. Similar to other retirement plan accounts, non-qualified distributions from a Roth IRA may be subject to a penalty upon withdrawl. Single < $101,000 Married < $159,000 Contributions 50 = $6,000 Traditional IRA An individual retirement account (IRA) that allows individuals to direct pre-tax income, up to specific annual limits, toward investments that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status and other factors. Contributions 50 = $6,000

Basic Investing Individual – In an individual account, there is only one beneficial owner, the only person who can control the investments within the account and request distributions of cash or securities from the account. There is only one person under one Social Security Number allowed. There is no limit on contributions. They are not tax –deferred. All earnings are taxable Custodial Accounts: UGMA/UTMA An investment account created for the benefit of a minor. There are specific rules regarding custodial accounts, which require that the assets be governed by a custodian until the minor reaches the age of majority in their state of residence. Custodial accounts are not tax-deferred. Gains up to a certain amount will be taxed at the child's rate. Educational IRAs are custodial accounts or trusts, exclusively for the purpose of paying the qualified higher-education expenses of the designated beneficiary. Education IRAs must accept contributions only in cash, and cannot accept contributions for a beneficiary after the beneficiary turns 18. Grow tax deferred. Only the designated grantor listed on the education IRA may make a contribution to the account.