Difference between a Traditional and Roth IRA Traditional IRA Taxed-deferred Taxed-deferred subject to tax at time withdrawal subject to tax at time withdrawal withdrawal can begin at age 59 1/2 withdrawal can begin at age 59 1/2 Roth IRA Taxable retirement saving account not subject to tax at time of withdrawal withdrawal can begin at age 59 1/2

Differences between Pensions and 401k Plans Pensions are fixed employer based Pensions are fixed employer based Predominately Employer contributed Predominately Employer contributed Employer controlled investing Employer controlled investing Formula controlled distribution generally 2% for every year worked Formula controlled distribution generally 2% for every year worked Government and unions Government and unions 401ks’ are variable employee based 401ks’ are variable employee based Self contributing with company matching Self contributing with company matching Employee controlled investing Employee controlled investing Employee controlled distribution Employee controlled distribution Private sector corporations Private sector corporations

Rules to Follow for 401k plans Start your 401k plans as soon as possible Start your 401k plans as soon as possible Put the Maximum contribution you can, as early as you can Put the Maximum contribution you can, as early as you can Always match company’s contribution Always match company’s contribution Don’t put all of your contribution in your company’s stock Don’t put all of your contribution in your company’s stock Be careful when taking a loan against your 401k plan Be careful when taking a loan against your 401k plan Diversify your portfolio have some of your 401k in stocks, bonds and mutual funds Diversify your portfolio have some of your 401k in stocks, bonds and mutual funds

Steps to take for Retirement 1. Participate in a 401k or a pension plan. 2. Start a Traditional or a Roth IRA plan. 3. Collect your social security fund at age Pay off your house so you have no mortgage payment.