Health and Life Insurance

Ch # 17, life insurance
There are a lot of advantages to saving for retirement with 401k plan. The first and mostly widely cited advantage is deferred taxes when one contributes to certain contribution limits, the contributions are not counted as income for federal income tax purpose.
Advantages of 401k plan:
Tax-deferred, payroll deduction, will not affect social security, funds are safe, employer matching part or all of the contribution. also there are advantages to the employer by offering 401k plan, such as attracting employees, contributions by employers are also tax free, withdrawal of fund for a hardship.
Disadvantages of 401k plan:
Market driven, limited payout, employer limitation, risk of investment falls on employee, limited investment options, restricted withdrawals, vesting.
The SEP-IRA is an account that many small business owners, and self-employed individuals use to save for retirement. This type of IRA provides bigger annual contribution limit than a traditional IRA, but the employer has to decide how much to contribute to each account on annual basis. As an employee, this can work against you because the employees have no control over what happens to their retirement account.
Administration, one of the benefits of SEP-IRA is that it is very simple to set up with any financial institution for a minimum fee.
Taxes, because the contribution is on pre tax basis, this lowers the taxable income for business. Money in the account can be invested in different stocks and bonds. Taxes are paid on the money when employee withdraws it after turning 59 1/2.
Employees, one of the potential disadvantage of this type of retirement account is that a business owner has to cover all employees who are eligible. This can be significant expense to the business if the business owner decide on the percentage to contribute to account. Because he has to contribute the same percentage to every employees' account. This at times does not allow business owner to...