Tuesday, December 17, 2013
Between 2011 and 2012, employers dropped about 26,000 retirement plans. If your employer decides to drop your 401(k), here are some alternatives.
First, consider a SIMPLE Plan, a boiled-down retirement plan for small businesses that can be cheaper to set up than a 401(k)-type plan.
Next, consider opening a Roth (401)k (set up by an employer) or a Roth IRA (set up yourself), both of which allow you to pull money out tax-free if you’ve been in the plan at least five years and are older than 59 ½. Roths make sense if you’ll be staying in a high tax bracket in retirement or think taxes will increase in the future.
Finally, consider opening a simplified employee pension (SEP), which, like a SIMPLE, has few rules and an easy set-up.
See John Wasik, What You Can Do If Your Employer Drops Your 401(k), Forbes, Dec. 9, 2013.