Bogleheads

[gbs]

This section explains retirement accounts and tax deferred investing. Other Topic Chapters which augment this topic include:

1. Withdrawal Strategies
2. Deferred Annuities
3. Immediate Annuities

[contributions needed]

Employer Provided Retirement Plans Defined:

401(k) Plan -401(K)
403(b)Plan-403(b) Plan
*90-24 Transfer-90-24 Transfer [This in-service transfer procedure is no longer available under current regulations]
412(i) Plan - 412(i) Plan
457 Plan - 457 Plan
Cash Balance Plan-Cash Balance Plan
Defined Benefit Plan- Defined Benefit Plan
DPSP - Deferred Profit Sharing Plan
SEP - Simplified Employee Plan
SIMPLE IRA - Savings Incentive Match Plan for Employees of Small Employers

Individual Retirement Plans Defined

Annuity - Annuity
*1035 Exchange-1035 Exchange
VA - Variable Annuity
IRA - Individual Retirement Account
Roth IRA - Roth IRA
Traditional IRA - Traditional IRA
*Extended IRA- Extended IRA

IRS Terms

RMD - Required Minimum Distributions
SEPP-Substantially Equal Periodic Payment

IRS Links

1. Pension Plan Contribution Limits 2001-2007
2. IRS minimum distributions table
contributed by: Norm
3. IRS Publication 560: Retirement Plans For Small Business (SEP,SIMPLE, and Qualified Plans) (currently 2005 publication)
4. IRS Publication 571:Tax-Sheltered Annuity Plans (403-b Plans)
5. IRS Publication 590: Individual Retirement Arrangements (currently 2005 publication)
6. IRS Publication 939: General Rule For Pensions And Annuities (contains acuarial tables for SEPP calculations)

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contributed by: Barry and Simba

[Barry Barnitz]

1. The Vanguard Center for Retirement Research

[Barry Barnitz]

Papers

1.Towards a Sensible System for Saving by Perun, Pamela J. (2006)

[Barry Barnitz]

Papers

1. Uncovering and Understanding Hidden Fees in Qualified Retirement Plans 2nd Edition – Published February 1, 2007 by Matthew D. Hutcheson, MS, CPC, AIFA®, CRC® Independent Pension Fiduciary

[gerry lef]

IRS publication 4484 gives a nice little overview of: payroll deduction ira, sep, simple ira plan, 401k, 403b, 457b govt, 457b tax-exempt and defined benefit plans.

http://www.irs.gov/pub/irs-pdf/p4484.pdf

Gerry L.

[dlpmpls]

Here's a nice list of 401K FAQ's

401K FAQ
_________________
Caution Monkey Throwing Darts

[Barry Barnitz]

Although SIMPLE IRA's comprise a small part of the employer-provided qualified plan universe, they are unique in being the sole plan that permits the individual employee to execute in-service trustee-to-trustee exchanges to a fiduciary of the employee's choosing. This transfer right, granted by the IRS, allows employees to escape high cost (load fund or variable annuity) funded plans for low cost fiduciaries.

The first consideration in the selection of a SIMPLE-IRA fiduciary is to determine the type of SIMPLE IRA an employer has established, either an IRS Form 5304-SIMPLE or an IRS Form 5305-SIMPLE.

* IRS Form 5304-SIMPLE: this form of SIMPLE IRA permits each employee to choose the financial institution for receiving contributions. The employer is required to send contributions on behalf of the employee directly to the financial institution of the employee's choice. Most participants are unaware of this option, so the employee should check with the employer to see what form was used to create the plan. Obviously, if the employee has this type of SIMPLE-IRA he can choose Vanguard as the SIMPLE IRA fiduciary and have all salary deferral and employer matches invested in Vanguard Funds. Vanguard imposes a $25 account fee per fund (waived if Vanguard assets exceed $100,000) on SIMPLE IRAs. If subject to account fees, employees would be best advised to restrict fund selection in order to reduce costs. Vanguard's SIMPLE IRA imposes a five fund maximum limit.

* IRS Form 5305-SIMPLE: this form of SIMPLE IRA requires all contributions to be deposited initially at a designated financial institution of the employer's choosing. An employee must execute trustee-to-trustee transfers in order to invest with a fiduciary of choice. During the first two years of SIMPLE IRA participation, a transfer can only be made to another SIMPLE IRA. After two years (dated from the first contribution into the plan) transfers can be made into a Traditional IRA. Using a Traditional IRA avoids the $25 Vanguard SIMPLE IRA account fees. Trustee-to-trustee transfers to Vanguard are executed by: (1) filling out an IRA Transfer Request; (2) including a recent SIMPLE IRA account statement; and (3) having Vanguard execute the transfer. Trustee-to-Trustee transfers do not affect annual contribution limits to personal IRA accounts.

With Form 5305-SIMPLE IRAs an employee should always seek to reduce transfer costs by selecting the lowest cost fund in the employer's plan for accumulating assets for transfer. In the case of load fund SIMPLE IRA's this usually is restricted to a no-load share class of a money market fund. Since on-going salary deferrals and employer matches will continue to be deposited with the employer's fiduciary, avoiding front end loads and back end surrender charges is essential in reducing transfer costs.

There are no limits as to the number and frequency of trustee-to-trustee transfers an employee can execute (if an employee receives plan assets directly, the assets must be "rolled-over" to a new SIMPLE IRA within 60 days. One is limited to only one such rollover per year. One should always make sure that the institution receiving the transfer handles the transaction directly.)

It is always a good idea to check about transfer requirements with both the new fiduciary and the employer fiduciary prior to executing an exchange since forms and transfer procedures can change over time.
_________________

blb
December Birthday Celebration: Ludwig van Beethoven

[TimDex]

There is a collection of links, etc., plus a sample letter on improving a tax-deferred plan, at this post:

http://www.diehards.org/forum/viewtopic.php?t=7573

Tim

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