In developing a retirement plan there are several factors to consider in addition to the amount you need or want to save.

1. Income Taxes.

The above discussion did not take into consideration income taxes. You might have to save more if you have to pay income taxes on all or part of your retirement benefit or your contributions. Distributions from qualified employer plans are always subject to retirement income tax. (more…)

Like the peculiar behavior of the dog in the night in the Sherlock Holmes story “Silver Blaze,” one of the obvious but overlooked clues about the insurance orientation of TIAA-CREF appears in the names of the accounts that are given to the various accumulation alternatives available to you. Each account is labeled an “annuity,” and each contribution is called a “premium.” To avoid confusion you should note that what TIAA-CREF labels as an “account,” you probably would call an investment choice or fund.

Stripped to the basics, your Retirement Annuity (or “Retirement Annuity”) boils down to an accumulation agreement between you and TIAA-CREF. (more…)

Having decided that a corporation can afford and should offer some type of employee benefits plan, the next step is to determine what type of plan or plans the company should adopt.

Employee benefit plans that provide some form of deferred benefits (that is, benefits deferred until after the employee retires) fall into two broad categories. A defined contribution pension plans provides an individual account for each participant and benefits are based upon the amount contributed by the company, or by the company and the employee, to that account, together with the investment results of the account. (more…)

Having determined the type or types of plans to be offered by the company, additional decisions regarding its features still must be made. The employees to be covered must be determined. Generally, employee eligibility is at the discretion of the employer, except that (under ERISA) employees must be eligible to participate one year after their first employment date (assuming they have reached the age of 25) and the plan must not discriminate in favor of executives, highly paid employees, or shareholders. (more…)

If you are an employee and your employer has established a 401k plan, it is a mistake to not participate and not contribute as much as possible. When you put your money investing in a 401k, you wish to get your money’s deserving for your investment. Your main goal is by the time your retirement come so that you can retire comfortably. (more…)

Another old adage says that we should learn from the mistakes of others. When it comes to retirement planning, there are many legal, tax, and retirement saving mistakes you can make as a business owner, retirement plan trustee, or plan participant. (more…)