Easy to set up and easy to administer, a Simplified Employee Pension (SEP) is one of the best ways a self-employed individual or small business can provide retirement benefits. A SEP is actually a type of retirement plan in which you, the employer, make contributions to an Individual Retirement Account (IRA) for yourself and your employees.
Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) is a plan in which the employer helps his employees save for retirement. This plan is designed for companies with 100 or fewer employees. The employer makes contributions to a SIMPLE IRA & the employee has the option of adding to the account by payroll deduction. This type of plan cuts down on recordkeeping and administrative costs.
The federal government established the 401(k) in 1981 with special tax advantages, to encourage people to prepare for retirement. They get their catchy name from the section of the Internal Revenue Code which established them – you guessed it, section 401(k). A 401(k) is a type of retirement plan that allows employees to save and invest for their own retirement. Through a 401(k), you can authorize your employer to deduct a certain amount of money from your paycheck before taxes are calculated, and to invest it in the 401(k) plan.