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Retirement Plans

Consider the following retirement products:

  • Simple IRA
  • SEP IRA
  • Regular IRA
  • Roth IRA
  • 401(k)
  • 403(b)

Retirement Glossary of Terms:

Individual Retirement Account (IRA)
Contributions to a traditional IRA are deductible from earned income in the calculation of federal and state income taxes if the taxpayer meets certain requirements. The earnings accumulate tax deferred until withdrawn, and then the entire withdrawal is taxed as ordinary income. Individuals not eligible to make deductible contributions may make nondeductible contributions, the earnings on which would be tax deferred.

Roth IRA
A nondeductible IRA that allows tax-free withdrawals when certain conditions are met. Income and contribution limits apply.

Employer-Sponsored Retirement Plan
A Tax-favored retirement plan that is sponsored by an employer. Among the more common employer-sponsored retirement plans are 401(k) plans., 403(b) plans, simplified employee pension plans and profit-sharing plans.

Qualified Retirement Plan
A pension, profit-sharing or qualified savings plan that is established by an employer for the benefit of the employees. These plans must be established in conformity with IRS rules. Contributions accumulate tax deferred until withdrawn and are deductible to the employer as a current business expense.

401(k) Plan
A defined contribution plan that may be established by a company for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 401(k) plan are taxed as ordinary income and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 1/2.

403(b) Plan
A defined contribution plan that may be established by a nonprofit organization or school for retirement. Employees may allocate a portion of their salaries into this plan, and contributions are excluded from their income for tax purposes (with limitations). Contributions and earnings will compound tax deferred. Withdrawals from a 403(b) plan are taxed as ordinary income, and may be subject to an additional 10 percent federal tax penalty if withdrawn prior to age 59 1/2.

Rollover
A method by which an individual can transfer the assets from one retirement program to another without the recognition of income for tax purposes. The requirements for a rollover depend on the type of program from which the distribution is made and the type of program receiving the distribution.

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Securities and advisory services offered by Cadaret Grant & Co., Inc.  |  Member FINRA/SIPC 9092 Main Street, Clarence, NY 14031 716-631-0190  |  Licensed in New York, California, Florida, Texas & Tennessee. | Floss Agency and Cadaret Grant are separate entities.