BOSTON (CBS) – Let’s start with the employer plans, 60% of employers offer some sort of retirement plan but only about 50% of employees take advantage of the plans offered.

401(k) plans are mostly used in private industry but are available to any employer to set up, 403(b) plans are for nonprofit organizations such as schools and hospitals, and the 457 plan covers state, county and city employees and there is a Thrift Savings Plan for federal employees.

Also available for some employees is a new option, the Roth 401(k) plan, where you contribute the dollars after taxes and the withdrawals in retirement are free of federal tax. Most employers are not offering a Roth 401(k) just yet.

Tax law changes made several years ago put retirement plans on an equal footing. This year the contribution limit is $17,500. But you have to be able to earn enough so that you have the extra $17,500 to contribute. Not too many employees are fortunate enough to do that.

If you are working for a small company with fewer than 100 employees they may be offering a SIMPLE IRA (Savings Incentive Match Plan for Employees) for your retirement plan, the limit this year is $12,000 and employers match up to 3%.

And if your employer does not offer a retirement plan, and 40% of employers do not, you are not off the hook. You can set up an IRA very easily at your local bank, a Mutual Fund Company or some of the big financial institutions like Fidelity or Schwab.

You can contribute up to $5,500. You must have earned income to contribute to an IRA. This includes the traditional IRA where you get a tax deduction for the contribution, a Spousal IRA where one of the spouses must have earned income, and a Roth IRA where you make your contribution with after tax dollars and a nondeductible IRA.


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