401 (k)
Defined contribution retirement plan qualified under the Internal Revenue Code that allows employees to contribute pre-tax dollars through a salary deferral arrangement.

How much can I contribute? 
Under current law, the limit is 100% of pay not to exceed $15,000 per calendar year.  This limit is adjusted for inflation and is $15,500 for 2008.

What is a catch-up contribution? 
Catch-up contributions allow employees (you) to “catch-up” for earlier years that you were unable to contribute to 401 (k) plans. You must be 50 years of age or older to be able to make this extra contribution.  The catch-up contribution is currently $5,000 and is in addition to the annual limit.

Can I withdraw my money if I need it? 
Each plan is different. You may be able to withdraw contributions due to financial hardship.  Some plans also have loan provisions that let you borrow from your account.  Please check your Summary Plan Description (SPD) for details of your plan features.

When do I have to start taking my money? 
Under normal situations, you are required to start taking minimum distributions by age 70 ½.

How often can I make changes to my investments? 
Depending on your plans provider, you may make changes to your investments daily.  Please see Resources for links to your 401 (k) Plan Provider for details.

Profit Sharing Plan
Defined contribution retirement plan qualified under the Internal Revenue Code that allows employers to contribute to an employee’s retirement account.

How much can an employer contribute? 
Under a Profit Sharing Plan, an employer can generally contribute up to 25% of gross pay, per employee, per calendar year.

Does an employee have to contribute each year? 
No, Profit Sharing Plans are discretionary. The employer can decide from year to year how much, if any, the contributions will be.

What is a vesting schedule? 
Vesting is “rights to” or the percentage of an employee’s account that has been earned.  Vesting schedules are based on a “years of service” formula.  Most Profit Sharing Plans have a 6 year vesting schedule as follows:

0-2 year           0%
2 years             20%
3 years             40%
4 years             60%
5 years             80%
6 years             100%

Roth 401 (k)
Roth contributions are special after-tax contributions in the 401 (k) plan.  For plans that allow Roth contributions, the employee can contribute before tax, Roth after tax or some combination of both. Roth contributions grow tax-deferred and may be tax free when withdrawn at retirement.
For more details on Roth 401 (k)’s please refer to your Plan Provider Link.

Simple IRA
Allow participant tax-deferral, flexible employer contributions and minimal paperwork.  Businesses with less than 100 employees are eligible.

Who can participate? 
An employee who earns $5000 during any two preceding years or is expected to earn $5000 in the current year is eligible.

How much must the employee contribute? 
Employers generally must match dollar for dollar up to 3% of pay.  However, the match may be reduced to as low as 1% for two of every five years.

How much can an employee contribute? 
An employee can defer up to $10,500 in 2008, with a catch-up contribution of $2,500 for employees 50 years of age or older.