Click on the links below to compare the most common types of retirement plans.

401(k) Plan | Defined Benefit Plan | Profit Sharing Plans | Simple 401(k) Plans
Who can establish?	Corporations, Sub-Chapter S, Self Employed, Sole Proprietorships, Non-Profit
Maximum eligibility requirements	2 years of service with employer, 1,000 hours of credited service per year, and attainment of age 21
Are employee contributions mandatory?	Yes, minimum required distribution based on monthly benefit and actuarial assumptions
Contribution limits: Employer	Based on actuarial assumptions (i.e., mortality and interest, etc.) (maximum $185,000 annual benefit cap per year, payable for the joint life of the husband and wife retiring at age 62)
Contribution limits: Individual	May allow after tax employee contributions
Catch-Up contributions for workers age 50 and older	Not available
When must the plan be established?	By fiscal year-end (12/31 for calendar-year plan)
When must Employer contributions be made?	By tax filing date plus extensions
Who directs investments?	Employer/Trustee
Are loans available?	Not usually
Vesting	3 vesting schedules: immediate, cliff, graded
Distributions before age 59 1/2	No tax penalty
Distributions after age 70 1/2	Required minimum distributions; may not aggregate total; each plan separate; may waive if still working and less than 5% owner
How are distributions taxed?	Taxed as ordinary income
Advantages	Contribution levels may be substantially higher than other types of retirement plans Favors older, highly compensated employees Vesting schedules may be applied to employer contributions