Saving for Retirement

Employee Retirement Benefits Explained

What's the difference between a pension, 401(k), 403(b), ESOP and profit-sharing plan? Find out.

Working for a company with a retirement plan does not necessarily mean that you are a member of the plan, or that you will actually get retirement benefits, or that the benefits will be as much as you think. It's important to know what you've got.

The following stories will help you figure out what sort of retirement plan your employer (or perspective employer) offers, how you can benefit from that plan and what drawbacks there are to the plan.

• 10 Questions to Ask
  You need to understand the basics of your employer's retirement plan.

• 401(k) Plans
  These accounts offer employees a tax-advantaged way to save for retirement.

• Roth 401(k)
  This new option gives employees access to tax-free income in retirement.

• Simple 401(k)
  This plan for small firms offers a nice cross between an IRA and 401(k).

• Employee Stock Ownership Plans and Profit-Sharing Plans
  These plans, that let employees share in their companies' profits, have advantages and disadvantages.

Adapted from Kiplinger's Practical Guide to Your Money, by the Editors of Kiplinger's Personal Finance magazine (Kaplan Publishing. Copyright 2005 The Kiplinger Washington Editors, Inc.) Available wherever books are sold or direct at kiplinger.com/store/books.

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