Even though retirement brings in a breath of relief, it also brings alongside a few other responsibilities denying which, days of wine and roses may just stay a never-coming-true dream. Therefore, to ensure all those days of leisurely pleasures become rewarding and exciting, a retirement planning is paramount.

Long gone are the days when retirement planning was all about spending time at length with the broker and reading financial statements and brochures. The process is no less than a cakewalk today; it has become so since tools were designed to crunch numbers and detangle every devilish detail that investment policies and tax-paying procedures are famous for. Balancing the financial demands being the keyword, there's no point running from making this crucial decision.

Among the most common ones, it's 401(K) retirement plans, Keough Plans, IRAs or Individual Retirement Accounts that stay at the top of people's choice; there are also present the qualifying pension and profit sharing plans that are offered by a person's workplace.

There are a few features that stay common for the top-notch retirement plans; these are:

• Contributions are either tax deductible or tax deferred.
• Hefty penalties apply when terms are not followed.

• 401(K) retirement plans: A 401(K) retirement plan is an account that's funded through payroll deductions before any tax is applied on it. Amounts from this fund are then invested to buy stocks, mutual funds or any other asset without taxing any capital gain or dividend or interests before a withdrawal. Tax advantages, employer match programs, customization of investments with maximum flexibility, portability and special withdrawals are considered the benefits of the 401K plans.



• Individual Retirement Accounts: These come under a few sub-heads as well, which are Roth IRA, Traditional IRA, SEP IRA, SIMPLE IRA, Self-Directed IRA and two other subtypes, namely Rollover IRA and Conduit IRA.



• ESOP: An abbreviation for Employee Stock Ownership Plan that works towards an employee's benefits towards them becoming stockowners of the company they are working for. ESOP requires investing in the sponsoring employer stocks and resembles largely the profit sharing plans. An employer may use it as a conduit for loans.

• Keogh Plans: Also known as a HR 10 plan, this tax-deferred retirement plan is for the self-employed individuals and supports other defined benefit/money purchase/profit sharing plans.