Can a person without a business have a qualified retirement plan?
No. Only a business can have a quialified retirement plan. Under current US retriement law, individuals are only permitted to have an IRA. What’s the use of saving taxes now for retirement? We get taxed on that money eventually, don’t we? Yes. But the idea is that if you save enough, early enough, most of the money you eventually pull out will come from the investment earnings and not the contributions. Example: if you put $20,000 per year into a qualified retirement plan, for 25 years, and earn just 6% on the money, you end up with $1.2 Million. And you only contributed $500,000. Also, you are likely to be in a lower tax bracket when you retire than while you are working. You will save whatever taxes you would have owed on the $20,000 each year; and you will likely withdraw the total in small increments and ultimately pay taxes in a lower tax bracket. So you create wealth for yourself all the way around. What kinds of retirement plans are available? The two major types are Defined Con
