There are several types of retirement plans available, including:
- 401(k): A 401(k) is a workplace retirement plan where employees can contribute a portion of their salary on a pre-tax basis, which is then investued for retirement. Employers may also match a certain percentage of the contributions.
- Individual Retirement Account (IRA): An IRA is a personal retirement account that individuals can contribute to on a pre-tax or after-tax (Roth IRA) basis. There are contribution limits and various investment options available.
- Roth 401(k) or Roth IRA: These retirement plans are similar to traditional 401(k) and IRAs, but contributions are made with after-tax money. The advantage is that qualified withdrawals in retirement are tax-free.
- Simplified Employee Pension (SEP) IRA: This retirement plan is designed for self-employed individuals and small business owners. Contributions are made by the employer and are tax-deductible.
- Simple IRA: Similar to a SEP IRA, a Simple IRA is a retirement plan for small businesses. Both employers and employees can contribute, and there are contribution limits and tax advantages.
- Defined Benefit Plan: This retirement plan is offered by employers, and it guarantees a specific income amount to employees upon retirement. The benefit amount is based on factors such as salary and years of service.
- Thrift Savings Plan (TSP): TSP is a retirement plan available to federal employees and members of the uniformed services. It operates similarly to a 401(k) plan, with pre-tax contributions and employer matching.
- Pension Plans: Some employers offer pension plans, which provide a fixed income stream to employees during retirement based on factors like years of service and average salary.
It's important to note that the availability and specific features of these retirement plans may vary depending on the country and employer.