Even if you’re just getting started on your financial journey, we believe it’s important to know your retirement plan options.

First off, who contributes to what? Or who pays into what retirement plan?

You may contribute to:

• IRA
• Simple IRA
• 401(k)
• 401(b)

Your employer may contribute to:

• Simple IRA
• 401(k)
• 401(b)

The government may contribute to:

• Social Security
• Medicare

So what are these retirement plans? We’re going to briefly discuss the two main retirement vehicles, IRA and 401(k), but urge you to be aware of the tax advantages, age restrictions, fees, contribution limits, and early withdrawal penalties for all of these retirement plans.

An IRA is an individual retirement account in your name allowing you to put money away for your future that can be invested into anything you want. There are several different types of IRAs, the most popular types being a Traditional IRA and a Roth IRA.

A 401(k) is a section of the Federal Tax Code that refers to plans that companies offer to employees to take money from their pay and put it into an account for their retirement. What you may not realize is that this is just one section of the Federal Tax Code. There are actually many more, including 402, 403(b), etc.

Financial Beginnings is a national 501(c)(3) nonprofit that empowers youth and adults to take control of their financial futures. Their educational programs incorporate all aspects of personal finance to give individuals the foundation they need to make informed financial decisions. Financial Beginnings reaches more than 200 K-12 schools and colleges and more than 100 community-based organizations annually, serving all groups with special focus on populations most in need. For more information, visit www.financialbeginnings.org.