Planning for retirement involves a series of steps that develop gradually as time goes on. In order to enjoy a relaxing, stable, and enjoyable retirement, it is essential to establish a financial safety net that will cover all expenses. Retirement Plans A 401(k) plan is a retirement account provided by employers as a benefit to their employees. This account enables you to allocate a portion of your pre-tax salary to investments that are tax-deferred, thereby lowering the taxable income for the year. A 401(K) Retirement Savings Plan Contributions to a Roth IRA are made using after-tax dollars, unlike a traditional IRA. Any earnings within the Roth account are not subject to further taxation. Roth IRAs The Roth 401(k) is a hybrid of the Roth IRA and a 401(k) that is offered by employers and is a relatively recent addition. Similar to a Roth IRA, contributions are made from your after-tax income rather than your pre-tax earnings. If you stay in the plan for a minimum of five years, contributions and earnings in a Roth are not subject to further taxation. Roth 401(k) The SIMPLE IRA is a retirement plan available to small businesses with up to 100 employees, functioning similarly to a 401(k SIMPLE IRA A Simplified Employee Pension (SEP) IRA enables self-employed individuals without employees to set aside a portion of their income for retirement in their own account. These contributions are fully deductible from taxable income. SEP IRA 15 9.