Name the three categories of tax-deferred retirement plans. How do they differ?
Three major categories of retirement plans are available to an individual, including: • employer-sponsored plans, • plans for self-employed persons, and • individual retirement accounts (IRAs). An individual may have the option to participate in plans in all three categories contingent upon his or her employment situation. Even a spouse without access to an employer-sponsored retirement plan has the option to establish an IRA. Teenagers or college students with earned income can also use an IRA to start saving for retirement. 5.Briefly describe 401(k), 403(b), and Section 457 plans. How might the employer match vary for each plan? How are maximum contribution limits for each changing? Three widely available employer-sponsored, salary-reduction plans for tax-deferred retirement savings include the following: • 401(k) plans: Offered through for-profit companies with over 25 employees. Employer may contribute a match or a percentage of a worker’s contribution. 401(k) plans often allow bor
