Retirement Plans & IRAs – Frequently Asked Questions (FAQs)

General

1. What retirement options are available in the marketplace?
   Employees can access IRAs (Traditional or Roth), as well as small business retirement solutions like SIMPLE IRAs or SEP IRAs for employers who want to provide more structured retirement benefits.

2. How do IRAs differ from 401(k)s?

• 401(k): Employer-sponsored plan with higher contribution limits, sometimes with an employer match.

• IRA: Individual Retirement Account, opened and owned by the employee, with more investment flexibility and lower annual contribution limits.

1. Why include IRAs in an employee benefits marketplace?
   Not every employer offers a 401(k). IRAs give employees an easy, affordable way to start saving for retirement with tax advantages.

Contributions & Tax Benefits

1. How much can I contribute to an IRA?
   For 2025, the IRS allows contributions up to $7,000 per year (or $8,000 if age 50+).

2. What is the difference between a Traditional IRA and a Roth IRA?

• Traditional IRA: Contributions may be tax-deductible, but withdrawals in retirement are taxed.

• Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals are tax-free.

1. Can contributions be made through payroll deduction?
   Yes. Many employees find it easier to save consistently when IRA contributions are set up directly through payroll.

Access & Portability

1. What happens to my IRA if I change jobs?
   Your IRA is owned by you, not your employer, so you keep it if you switch jobs. Payroll deductions may stop, but you can continue contributions directly.

2. Can I roll over an old 401(k) into an IRA?
   Yes. Rolling over a 401(k) into an IRA can consolidate your savings and often gives you more investment choices.

Costs & Investments

1. Are there fees to open or maintain an IRA?
   Some providers charge account or investment management fees, but many low-cost options are available. The marketplace highlights transparent fee structures so employees can compare.

2. What kinds of investments can I hold in an IRA?
   IRAs can include mutual funds, ETFs, stocks, bonds, and other investment options, depending on the provider.

Employers & HR

1. Does offering IRAs cost the employer anything?
   No. IRAs are generally employee-funded. Employers simply provide access through the marketplace and may choose to make payroll deduction available.

2. What if I want to set up a retirement plan for my business?
   The marketplace also supports small business retirement plans (like SIMPLE or SEP IRAs) that are affordable and easier to administer than 401(k)s.

3. Does this create extra compliance work for the employer?
   No. IRAs are individual accounts, so the employer does not take on ERISA compliance responsibilities unless they sponsor a retirement plan.