Author Topic: What kind of tax available accounts are available?  (Read 1568 times)

hexdexorex

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What kind of tax available accounts are available?
« on: July 27, 2014, 08:43:31 AM »
Gf has put me in charge of managing her finances. She so far has managed to save a good chunk but for some reason - i guess like a lot of young adults has chosen to keep most of her money in cash

http://www.marketplace.org/topics/your-money/young-adults-choose-save-cash-instead-investing

So, this year I want to take down her taxable income and so far I have just contributed to a Trad IRA. She works at a university and it has some kind of measly pension thing that only seems to have 6k in it after 3 years. She said she inquired to HR there and they said she is contributing the max to that (that seems really low). Does she have any other options open? I personally can contribute 5500 to roth or traditional and 17500 to a 401k. I am guessing because she has a pension she cannot also have a 401k?

Oh and at the end of this month her contract ends....so there might be a period of time where she is unemployed...does that open up any other chances for her to put money into these type of accounts?
« Last Edit: July 27, 2014, 08:45:11 AM by hexdexorex »

Gin1984

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Re: What kind of tax available accounts are available?
« Reply #1 on: July 27, 2014, 08:44:46 AM »
She should check to see if she has access to a 457 or 403b.

Psychstache

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Re: What kind of tax available accounts are available?
« Reply #2 on: July 27, 2014, 09:36:26 AM »
She should check to see if she has access to a 457 or 403b.

If she is really lucky, some schools offer a 403b AND a 457. The only other option that comes to mind are FSAs and HSA, but those require specific kinds of health insurance to be eligible.

kkbmustang

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Re: What kind of tax available accounts are available?
« Reply #3 on: July 29, 2014, 06:53:03 PM »
Here's a quick, off the top of my head, list of types of retirement type plans:

Defined Contribution Plans (Employer Sponsored)
-Profit sharing plan: a plan that allows an employer to make a profit sharing contribution
-401(k): a feature of a profit sharing plan that allows employee deferrals (can allow for pre-tax contributions, after-tax contributions, Roth contributions)
-401(m): a feature of a profit sharing plan that provides for employer matching contributions
-Money Purchase Pension Plan
-Employee Stock Ownership Plan (ESOP): Not to be confused with stock options. In this kind of plan, the primary purpose of the plan is to invest in company stock. Contributions are generally made in the form of company stock.

Defined Benefit Plans (Employer Sponsored)
-Traditional Defined Benefit Plan
-Cash Balance Plan

Government Sponsored Plans
-403(b): a tax sheltered annuity plan sponsored by public schools, colleges, universities and certain tax-exempt entities; contributions can be made by employees and employers
-457(b) (sometimes referred to as an eligible plan): similar to 401(k) but sponsored by government entities
-457(f) (an ineligible plan): different tax consequences than 457(b)

Individual Sponsored Plans
-Traditional IRA
-Roth IRA

Small Business/Sole Proprieter Plans
-SIMPLE IRA
-Simplified Employee Pension Plan (SEP)
-Payroll Deduction IRA
-Simple 401(k) Plan

Usually Reserved for Top Executives (With Different Tax Treatment For Each)
-409A: Nonqualified Deferred Compensation Plan
-Equity Based Plans (stock options (qualified/non-qualified), restricted stock, restricted stock units, phantom equity, stock appreciation rights, etc.)
-Long-Term Incentive Plans (usually paid in cash, tied to company and individual performance)
-Change in Control Plans/Agreements (providing benefits when there is a change in control)


Hope this is helpful.

More information can be found:
www.irs.gov  http://www.irs.gov/Retirement-Plans/Benefits-Practitioner
www.dol.gov  http://www.dol.gov/dol/topic/retirement/