Saver’s Credit
Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit
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Excess deferral
Definition Salary deferral contributions, contributions are limited to the lesser of the IRC § 402(g) limit or 100% of compensation. Salary deferral contributions in excess
Deduction
Definition A deduction is a Tax write-off which is allowed for contributions to traditional IRAs or employer sponsored plans. Individuals who are active participants are
Annual Benefit Limit
Definition The annual benefit limit for defined benefit plans is the lesser of: A) 100% of the participant’s average compensation for his or her highest
Elective Deferral Contribution
Definition Elective deferral contributions, also known as salary deferral contributions made to SIMPLE IRAs, 401(k) plans, SARSEPs, 403(b) plans . A participant may defer up
Annual Addition Limit
Definition The annual Addition limit is the maximum amount that may be added to a defined contribution plan on behalf of a participant for any
SIMPLE 401(k) Plan
Definition A SIMPLE 401(k) plan is a 401(k) plan established by a small business for it’s employees. Earnings accrue on a tax-deferred basis and distributions
Individual Retirement Arrangement (IRA)
Definition Individual retirement arrangement (IRA) is an umbrella term that covers individual retirement account and individual retirement annuity. These are retirement savings vehicles established by
SIMPLE IRA -Savings incentive match plan for employees of small employers
Definition Savings incentive match plan for employees of small employers (SIMPLE IRA) An IRA based retirement savings vehicle, established by a small business owner for
What is the 10-Year Rule for beneficiaries?
Definition The beneficiary 10-year rule is the maximum period that designated beneficiaries may keep inherited retirement accounts in a beneficiary account. Examples include beneficiary IRAs,
