Retirement Plan FAQ

Questions:

• What is a qualified retirement plan?
• Why are 401(k) plans so popular?
• What is a Keogh plan?
• What does it mean to be "vested" in my retirement plan?
• Is an IRA a retirement plan?
• Can people who work for a company and own their own business have a retirement plan both at work and through their small business?
• Is my retirement plan protected from creditors?

Answer:

What is a qualified retirement plan?

A qualified plan is simply one that is described in Section 401(a) of the Tax Code. The most common types of qualified plans are profit sharing plans (including 401(k) plans), defined benefit plans, and money purchase pension plans. In general, your contributions are not taxed until you withdraw money from the plan. Most retirement plans that you obtain through your job are qualified plans.