For most people, saving for retirement has become an important investment objective for at least part of their portfolio. Investors may participate in retirement plans that have been established by their employers, as well as those they have established for themselves. Both corporate and individual plans may be qualified or non-qualified, and it is important for an investor to understand the difference before deciding to participate. Series 62 candidates can expect to see 5 to 10 questions on the exam dealing with retirement plans. The following table compares the key features of qualified and nonqualified plans.

Feature Qualified Non Qualified
Contributions Pre Tax After Tax
Growth Tax Deferred Tax Deferred
Participation must be allowed For everyone The corporation may choose who gets to participate
IRS Approval Required          Not required
Withdrawals 100% taxed as ordinary income Growth in excess of cost base is taxes as ordinary income

 



Individual Plans

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Frequently Asked Questions
  1. I'm about to retire. If I pay off my mortgage with after-tax money I have saved, I can save 6.5%. Should I do this?

    Only you and your financial advisor, family, accountant, etc. can answer the "should I?" question because there are many ...
  2. My wife and I both converted our Traditional IRAs to Roth IRAs over a decade ago and have invested the maximum allowed each year since. We're buying our first home soon. Do we both qualify for one-time, tax-free, $10,000 distributions?

    You and your spouse each qualify for a penalty-free distribution of up to $10,000 for the purchase, acquisition or construction ...
  3. Is a Thrift Savings Plan (TSP) a qualified retirement plan?

    Take advantage of the government's retirement plan for employees with the Thrift Savings Plan. As with a 401(k), contributions ...
  4. Who manages the assets in a Roth 401(k) account?

    Learn how to personally manage the assets in your Roth 401(k) plan and determine the best options available to help meet ...
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