Question/Topic Individual(k) SEP/IRA SIMPLE 401(k) Profit Sharing Money Purchase Defined Benefit 401(k) Roth 401(k) Roth IRA Traditional IRA SIMPLE IRA 403(b) Non-ERISA Title I
Plans with Only
Salary Deferral Contributions
Roth 403(b) Non-ERISA Title I
Plans with Only
Salary Deferral Contributions
403(b) ERISA Title I Plans with Employer Contributions Roth 403(b) ERISA Title I Plans with Employer Contribution 457(b) EligiblePlans with Only Salary Deferral Contributions 457(f) Ineligible Plans with Employer Contribution
Who Can Establish? Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships-"Owner(s) Only," Partnerships, LLCs, Businesses with "Excludable" Common-Law Employees Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships, Partnerships, Non-Profit (not eligible for salary deferral) Employers with no more than 100 employees, including sole proprietors and non-profit entities (cannot maintain another qualified plan) Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships, Partnerships, Non-Profit Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships, Partnerships, Non-Profit Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships, Partnerships, Non-Profit Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships, Partnerships, Non-Profit Corporations, Sub-Chapter S, Self-Employed, Sole Proprietorships, Partnerships, Non-Profit Individual with compensation Individual with compensation Employers with no more than 100 employees who earned $5,000 or more during preceding 2 calendar year and expected to earn at least $5,000 (cannot maintain another retirement plan) Non-profit organizations exempt under IRC Section 501(c)(3) (e.g., churches, hospitals and schools) Non-profit organizations exempt under IRe Section 501(c)(3) (e.g., churches, hospitals and schools) Non-profit organizations exempt under IRC Section 501(c)(3) (e.g., churches, hospitals and schools) Non-profit organizations exempt under IRC Section 501(c)(3) (e.g., churches, hospitals and schools) Governmental employers, public utility companies, elementary and secondary schools, public universities and colleges, city, county and state hospitals, certain non-governmental tax-exempt employers Governmental employers, public utility companies, elementary and secondary schools, public universities and colleges, city, county and state hospitals, certain non-governmental tax-exempt employers
Maximum Eligibility Requirements Employee must be 21 and ave one year of service (typically 1,000 hours).However, not relevant because there is only one employee/ participant. Worked for employer during any period of three of the last immediately preceding five years; however short. At least 21 years of age. $550 annual compensation. Employees must be 21 and have one year of service (typically 1,000 hours). Two years of service with employer (typically, 1,000 hours per year) with immediate vesting. At least 21 years of age. Two years of service with employer (typically, 1,000 hours per year) with immediate vesting. At least 21 years of age. Two years of service with employer (typically, 1,000 hours per year) with immediate vesting. At least 21 years of age. Two years of service with employer (typically, 1,000 hours per year) with immediate vesting. At least 21 years of age. For deferrals, maximum service is one year. Two years of service with employer (typically, 1,000 hours per year) with immediate vesting. At least 21 years of age. For deferrals, maximum service is one year. Must have earned income of <$114,000 for single filers and <$166,000 for joint filers,
<$10,000 married filing separate
Must have eamed income and be under the age of 70:1,6 $6,000 in compensation for any two preceding years and is expected to earn $6,000 in current years The option to participate generally must be offered to all eligible employees (except certain student employees and employees who work less than 20 hours per week). The option to participate generally must be offered to all eligible employees (except certain student employees and employees who work less than 20 hours per week). Minimum participation, minimum coverage and nondiscrimination requirements may apply Minimum participation, minimum coverage and nondiscrimination requirements may apply Tax-Exempt-Eligibility for a select group of management or highly compensated employees, except if the group is church-related Governmental-None Eligibility for a select group of management or highly compensated employees
Are Contributions Mandatory? No No Employer-Yes
Employee-No
No Yes Yes No No No No Employer-Yes
Employee-No
No No Generally no, but may be designed with employer mandatory contributions Generally no, but may be designed with employer mandatory contributions No No
Contribution Limits-Employer The employer's current-year deduction is limited to deferrals plus 25% ofcompensation paid to all eligible participants. Allocation limited to lesser of 100% of compensation or $49,000 per participant. 25% of each employee's compensation (maximum $49,000). ($245,000 salary cap) Match deferrals $1 for $1 up to the first 3% of compensation or non- elective contribution of 2% of compensation. $245,000 salary cap for both contributions. 25% of participating payroll. Allocation limited to lesser of 100% of compensation or $49,000 per participant. 25% of compensation paid to all eligible participants. Allocation limited to lesser of 100% of compensation or $49,000 perparticipant. Based on actuarial assumptions ($195,000 annual benefit cap for a life annuity payable at age 62 with ten years of credited participation). The employer's current-year deduction is limited to deferrals plus 25% of compensation paid to all eligible participants. Allocation limited to lesser of 100% of compensation or $49,000 per participant. The employer's current-year deduction is limited to deferrals plus 25% of compensation paid to all eligible participants. Allocation limited to lesser of 100% of compensation or $49,000 per participant. N/A N/A Match deferral $1 for $1 up to 3% of compensation or 2% (subject to $245,000 salary cap) nonelective contributions N/A N/A The employer's contributions (including elective deferrals) to an employee's account should not be more than the lesser of $49,000 or 100% of the employee's compensation for the year. The employer's contributions (including elective deferrals) to an employee's account should not be more than the lesser of $49,000 or 100% of the employee's compensation for the year. Employer and employee contributions combined cannot exceed 100% of the employee's compensation or $16,500, whichever is less. Employer contributions offset employee deferrals. No limit
Contribution Limits-Individual $16,500 salary deferral limit under IRC Section 402(g) Employee IRA-$5,000 $11,500 salary deferral limit under IRC Section 408(p) No pre-tax employee
contributions
No pre-tax employee contributions No pre-tax employee contributions $16,500 salary deferral limit under IRC Section 402(g) $16,500 salary deferral limit under IRC Section 402(g) 100% of earned income up to $5,000 per individual to all IRAs 100% of earned income up to $5,000 per individual to all IRAs 100% of earned income up to $11,500 100% of compensation or $16,500, whichever is less. Special catch-up provisions may increase the contribution limit. 100% of compensation or $16,500, whichever is less. Special catch-up provisions may increase the contribution limit. 100% of compensation or $16,500, whichever is less. Special catch-up provisions may increase the contribution limit. 100% of compensation or $16,500, whichever is less. Special catch-up provisions may increase the contribution limit. 100% of compensation or $16,500, whichever is less. Special catch-up provisions may increase the contribution limit. Employer contributions offset employee deferrals. No limit
Catch-up Contributions For Workers Age 50 and Older $5,500 $1,000-Employee IRA $5,500-Existing SAR-SEP $2,500 N/A N/A N/A $5,500 $5,500 $1,000 $1,000 $2,500 $5,500 $5,500 $5,500 $5,500 Tax-Exempt-N/A Governmental-$5,500. A special catch-up provision for participants within three years of normal retirement age may apply. N/A
When Must the Plan Be Established? By fiscal year-end (12/31 for calendar-year plan).Deferrals not permitted until the plan is established. By tax-filing date plus extensions By October 1 for existing busi-nesses. As soon as adminis-tratively feasible for businessesestablished after October 1. Deferrals not permitted until plan is established. By fiscal year-end (12/31 for calendar-year plan) By fiscal year-end (12/31 for calendar-year plan) By fiscal year-end (12/31 for calendar-year plan) $5,500 By fiscal year-end (12/31 for calendar-year plan). Deferrals not permitted until plan is established. $5,500 By fiscal year-end (12/31 for calendar-year plan). Deferrals not permitted until plan is established. April 15 following the taxable year for which the contribution is being made (e.g., 4/15/2009 for 2008) April 15 following the taxable year for which the contribution is being made (e.g., 4/15/2009 for 2008) October 1 for existing businesses. As soon as administratively feasible forbusinesses established after October 1. The plan may be established any time during the calendar year. The plan may be established any time during the calendar year. The plan may be established any time during the calendar year. The plan may be established any time during the calendar year. The plan may be established any time during the calendar year. The plan may be established any time during the calendar year.
When Must Contributions Be Made? Employer-By tax-filing date plus extensions
Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld
Employer-By tax-filing date plus extensions
Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld
Employer-By tax-filing date plus extensions
Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld
By tax-filing date plus extensions By tax-filing date plus extensions By tax-filing date plus extensions Employer-By tax-filing date plus extensions
Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld
Employer-By tax-filing date plus extensions
Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld
April 15 following the taxable year for which the contribution is being made (e.g., 4/15/2009 for 2008) April 15 following the taxable year for which the contribution is being made (e.g., 4/15/2009 for 2008) Employer-By tax-filing date plus extensions Employee-On a deferral basis Salary deferral ongoing from payroll Salary deferral ongoing from payroll Employer-The plan may be funded any time during the calendar year. Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld Employer-The plan may be funded any time during the calendar year. Employee-As soon as reasonable, but no later than the 15th business day of the month following the month in which the deferrals are withheld Salary deferral ongoing from payroll Anytime
Who Directs Investments? Individual Individual Employer/trustee or plan may allow individual direction Employer/trustee or plan may allow individual direction Employer/trustee or plan may allow individual direction Employer/trustee Employer/trustee or plan may allow individual direction Employer/trustee or plan may allow individual direction Individual Individual Individual Individual Individual Employer/trustee or plan may allow individual direction Employer/trustee or plan may allow individual direction Individual Employer/trustee; however, plan may allow individual suggestions
Are Loans Available? Yes No Yes Yes Yes Yes Yes Yes No No No Yes Yes Yes Yes Tax-Exempt-No Governmental-Yes No
Vesting Full & immediate Full & immediate Full & immediate Three vesting schedules: immediate, cliff, graded Three vesting schedules: immediate, cliff, graded Three vesting schedules: immediate, cliff, graded Three vesting schedules: immediate, cliff, graded Three vesting schedules: immediate, cliff, graded Full & immediate Full & immediate Full & immediate Full & immediate Full & immediate Three vesting schedules: immediate, cliff, graded Three vesting schedules: immediate, cliff, graded Any vesting schedule Any vesting schedule
Distributions Before
Age 59 1/2
10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty unless utilizing substantially equal payments, death, disability, medical expenses exceeding 7.5% of AGI or purchase of health insurance while employed 10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty unless death, disability, separation from service and receiving substantially equal periodic payments or separating from service after age 55 10% tax penalty on earnings unless withdrawal is for death, disability, first-time home purchase ($10,000 lifetime in aggregate to all IRAs), substantially equal periodic payments, certain major medical expenses or certain long-term unemployment expenses 10% tax penalty unless the distribution is because of death, disability, the timely withdrawal of an excess contribution, certain qualified medical or education expenses or first-time home purchase ($10,000 limit in aggregate to aIiIRAs). Waived if the di 10% tax penalty unless the distribution is because of death, disability, the timely withdrawal of an excess contribution, certain qualified medical or education expenses and first-time home purchase ($10,000 limit in aggregate to aIiIRAs). Waived if the d 10% tax penalty unless over 55 and separated from service (except if self-employed or more than 10% owner) or death or disability. Distributions are only allowed upon the occurrence of a triggering event. (See "Eligible Rollovers".) No tax penalty 10% tax penalty unless over 55 and separated from service (except if self-employed or more than 10% owner) or death or disability. Distributions are only allowed upon the occurrence of a triggering event. (See "Eligible Rollovers".) 10% tax penalty unless over age 55 and separated from service (except if self-employed or more than 10% owner) or death or disability. Distributions are only allowed upon the occurrence of a triggering event. (See "Eligible Rollovers".) 10% tax penalty unless over age 55 and separated from service (except if self-employed or more than 10% owner) or death or disability. Distributions are only allowed upon the occurrence of a triggering event. (See "Eligible Rollovers".) Severance from employment, unforeseeable emergencies, small inactive accounts. Also, plan termination and QDROs (if stated in the plan language). No tax penalty applies to any distribution. Distributions must be made on any monies that become vested. No tax penalty applies to any distribution.
Distributions For Ages 59 1/2 - 70 1/2 No tax penalty No tax penalty No tax penalty No tax penalty No tax penalty No tax penalty No tax penalty No tax penalty for "qualified distributions." A distribution is qualified if the Roth 401(k) account has been established for at least five years and one of the following events occurs: attainment of age 59 1/2, disability or death. In any of these cases, th No tax penalty for "qualified distributions." A distribution is qualified if the Roth IRA has been established for at least five years and one of the following events occurs: attainment of age 59 1/2, disability, death or a first-time home purchase. In any o No tax penalty No tax penalty No tax penalty No tax penalty for "qualified distributions." A distribution is qualified if the Roth IRA has been established for at least five years and one of the following events occurs: attainment of age 59 1/2, disability, death or a first-time home purchase. In any o No tax penalty No tax penalty for "qualified distributions." A distribution is qualified if the Roth 403(b) account has been established for at least five years and one of the following events occurs: attainment of age 59 1/2, disability, death or a first-time home purchas Severance from employment, unforeseeable emergencies, small inactive accounts. Also, plan termination and QDROs (if stated in the plan language). No tax penalty applies to any distribution. Distributions must be made on any monies that become vested. No tax penalty applies to any distribution.
Distributions After Age 70 1/2 Required minimum distributions. May not aggregate total. Each plan separate.Not required if still working and 5% or less owner. Required minimum distributions. May remove aggregate total from one account. Required minimum distributions. May not aggregate total. Each plan separate.Not required if still working and 5% or less owner. Required minimum distributions. May not aggregate total. Each plan separate.Not required if still working and 5% or less owner. Required minimum distributions. May not aggregate total. Each plan separate. Not required if still working and 5% or less owner Required minimum distributions. May not aggregate total. Each plan separate. Not required if still working and 5% or less owner. Required minimum distributions. May not aggregate total. Each plan separate. Not required if still working and 5% or less owner Required minimum distributions, unless prior to age 70 1/2, a participant rolls to a Roth IRA any portion of the Roth 401(k) account that is an eligible rollover distribution. No required minimum
distributions at any age
Required minimum distributions as late as April 1 following the year in which the individual reaches age 70 1/2 Required minimum distributions as late as April 1 following the year in which the individual reaches age 70 1/2 Required minimum distributions by April 1 of the calendar year in which the participant becomes age 70 1/2 or the calendar year in which he or she retires Required minimum distributions, unless prior to age 70 1/2, a participant rolls to a Roth IRA any portion of the Roth 403(b) account that is an eligible rollover distribution Required minimum distributions by April 1 of the calendar year in which the participant becomes age 70 1/2 or the calendar year in which he or she retires Required minimum distributions unless prior to age 70 1/2, a participant rolls to a Roth IRA any portion of the Roth 403(b) account that is an eligible rollover distribution Required minimum distributions by April 1 of the calendar year in which the participant becomes age 70 1/2 or the calendar year in which he or she retires No required minimum distributions
How Are Distributions
Taxed?
Taxed as ordinary income Taxed as ordinary income Taxed as ordinary income Taxed as ordinary income Taxed as ordinary income Taxed as ordinary income Taxed as ordinary income Principal and earnings withdrawn are tax-free Principal and earnings withdrawn are tax-free. Taxed as ordinary income Taxed as ordinary income Taxed as ordinary income Principal and earnings withdrawn are tax-free. Taxed as ordinary income Principal and earnings withdrawn are tax-free. Taxed as ordinary income Taxed as ordinary income
Eligible Rollovers Must have triggering event (e.g., plan termination, death, separation from service,disability or age 59 1/2) One 60-day rollover per 12-month period.Reported as distribution and returned as a rollover contribution. Must have triggering event (e.g., plan termination, death, separation from service,disability or age 59 1/2) Must have triggering event (e.g., plan termination, death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., plan termination, death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., plan termination, death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., plan termination, death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., plan termination, death, separation from service, disability or age 59 1/2) Roth IRA to Roth IRA-rulesfollow the Traditional IRArollover rules Traditional IRA to Traditional IRA Traditional IRA to Roth IRA; pre-tax dollars are taxed as ordinary income. Only from one SIMPLE IRA to another SIMPLE IRA. 403(b), 457, SEP/IRA, Roth IRA or a Qualified Plan and Traditional IRA after two years of participation Must have triggering event (e.g., death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., death, separation from service, disability or age 59 1/2) Must have triggering event (e.g., death, separation from service, disability or age 59 1/2) Not tax-exempt Not allowed
Portability: Rollovers Among Plans - Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Roth IRA1
1 Only if the taxpayer's AGI for the tax year does not exceed
$100,000, and the taxpayer is not married filing separately
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA - IRA
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA - IRA
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Roth IRA
- Roth 403(b)*
- Roth 401(k)*

* Subject to exceptions
- Roth IRA - Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Roth IRAl
1 Only if the taxpayer's AGI for the tax year does not exceed $100,000, and the taxpayer is not married filing separately
- Qualified Plan 1
- SIMPLE IRA
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA1
- Roth IRA2
1 Only after the individual has participated in the SIMPLE plan for two years
2 Only if the taxpayer's AGI for the tax year does not exceed
$100,000,
- Qualified Plan
- 403(b) Plan
- 457 Governmental Plan
- SEP/IRA
- IRA
- Roth IRA
- Roth 403(b)*
- Roth 401(k)*
- Subject to exceptions
- Qualified Plan - 403(b) Plan - 457 Governmental Plan - SEP/IRA - IRA - Roth IRA - Roth 403(b)* - Roth 401(k)* * Subject to exceptions Applies to Governmental 457s only: - Qualified Plan* - 403(b) Plan - 457 Governmental Plan - SEP/IRA - IRA (except to a SIMPLE IRA) *except to a SIMPLE 401(k) No limit on contributions
Advantages If compensation is <$195,000, deductible contribution is larger than amount allowed under PS or MP plan. Contribution flexibility. Simplified plan administration. No annual 5500 reporting of plans below $250,000 of assets. Access to loans. Asset consolida Simple to establish and maintain. No annual 5500 filing requirements. Contributions deductible to employer. Contributions deductible to employer. No discrimination testing. Not subject to top heavy rules. Some funding responsibility with employees. Deferral reduces taxable income to employee. Contributions discretionary and deductible to employer.Flexibility in plan design. Loans may be allowed. Plan expenses may be deductible to employer. Vesting schedules. Contributions fixed and deductible to employer. Plan expenses may be deductible to employer. Vesting schedules. Deductible contribution levels may be substantially higher than other types of retirement plans. Favors older, highly compensated employees. Vesting schedules. Flexibility in plan design. Contributions deductible to employer. Loans may be allowed. Plan expenses may be deductible to employer. Funding responsibility with employees. Deferred amount reduces employee's taxable income. Vesting schedules. - Tax-free growth
- No income limits to qualify for a Roth account, unlike a Roth IRA
- Higher contribution and catch-up limits than a Roth IRA
Tax-free growth Tax-deferred growth Simple to establish and maintain. No annual 5500 filing requirements. Contributions deductible to employer. No discrimination testing. Not subject to top heavy rules. Some funding responsibility with employees. Deferral reduces taxable income to employee. Deferred amount reduces employee's taxable income. Special elections may further increase the amounts an employee can defer. Earnings are tax-deferred. Contribution limits are greater than IRAs. Loans may be allowed. - Tax-free growth
- No income limits to qualify for a Roth account, unlike a Roth IRA
- Higher contribution and catch-up limits than a Roth IRA
Deferred amount reduces employee's taxable income. Special elections may further increase the amounts an employee can defer. Earnings are tax-deferred. Contribution limits are greater than IRAs. Loans may be allowed. - Tax-free growth - No income limits to qualify for a Roth account, unlike a Roth IRA - Higher contribution and catch-up limits than a Roth IRA If an employer offers a 403(b) or 401(k) plan in addition to the 457(b) plan, an employee can defer the maximum to both plans.Employers may allow contributions for only certain key employees. Employers may allow contributions for only certain key employees.