Both Plans are approved by Congress and the IRS - you CAN save in either.
Which list of options would you choose to be a part of your retirement plan?
|
A |
B |
|
IRS
Contributions
Earnings
Principal Withdrawals
Earnings Withdrawals
Retirement Income
Beneficiary Value3
Contribution Limit4
Pre age 59 ½ Penalty5
Mandatory Distributions
Loans
Loan Repayment
Fund Completion
Guaranty For Surviving Beneficiary
Historical Rate of Return
Maximize Pension Option
Able to be "Own Bank"
Includes Long-Term Care
Use for College Funding
Avoid Social Security Taxes2 |
Approved
Tax Deferred
Tax Deferred
Taxed
Taxed
Taxed
Taxed
$5K-$22K
10% Penalty
Age 70 ½
$50K Max, if allowed
Mandatory
No
No
3 - 9%
No
No
No
No
Not Likely |
Approved
Taxed
Tax Deferred
Tax FREE1
Tax FREE1
Tax FREE1
Tax FREE1
NO Limit
None
None
No Limit
Optional
Yes
Yes
7 - 9%
Yes
Yes
Yes
Yes
Maybe |
Age 45: Save $1,000 month for 15 years at 7% net fees:
Results Net of Taxes6
|
A |
B |
|
Retirement Income at Age 61
Account Value age 61
Retirement Income Age 71
Account Value Age 71
Retirement Income Age 100
Account Value Age 100
Total Taxes Paid2 |
$40,0000/yr
$288,000
0
0
0
0
$249,792 |
$40,000/yr
$317,000
$40,000
$243,000
$40,000
$6,000,000
$97,727 |
1 As long as the plan is in force (options available to guaranty this for life).
3 Both options may be subject to additional Federal Estate Tax. Exemption amount varies by year and Congress.
4 IRA to 401K contribution limits for 2010 for most employees, other plans subject to different amounts.
52010 IRS Regs, some distributions exempt from penalty.
6 This is a hypothetical illustration based on certain assumptions. Your personal situation may vary depending on age, tax rate, return and other variables.
