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Summary of retirement plan options

Our current troubled economy has left many Americans wondering how they will ever retire. Investment values have taken a nose dive. Still, assuming people want a financially comfortable retirement, they need to have sources of income to draw upon during what could be a 20–30+ year period of their life.

A retirement plan remains as one of the best sources of additional income. Not only does it generally offer tax deductions to the sponsoring employer, it also allows employees covered by the plan to build retirement benefits without currently paying taxes on the increasing value of those benefits. Unfortunately, dealing with retirement plans can often leave employers confused about the choices available or concerned about the costs of each of the options. Perhaps they’d like to help their employees (and themselves) save more for retirement, but they don’t know where to start. If this describes your situation, we’d like to help. What follows is a two-page table that describes the key characteristics of the most common retirement planning options. It moves from the simplest option on the left side (a payroll deduction IRA, which is really nothing more than a way to assist employees in setting up their own IRAs) to the most complex choice on the right (the traditional defined benefit plan that guarantees employees a certain specified benefit at retirement).