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Retirement Planning


Life has three phases: growth, production and retirement.   To have retirement confidence, it is important for you to know where you are in life and what steps need to be taken to build or maintain your retirement nest-egg. Since retirement has become for many of us the longest stage of our lives, understanding asset accumulation, asset growth and asset preservation is critical.  


If accumulation starts early, even a small amount put away each month can grow substantially because of compounding investment earnings.  If late to the process, there are options like finding new sources of income and stretching those available retirement dollars.


VBC registered representatives can help you understand how retirement plans work for both businesses and individuals.  We can assist you in selecting  investments that can enable your retirement assets to grow before and during retirement.

Traditional Individual Retirement Account (IRA)

An IRA is a special custodial or trust account set-up through brokerage firms, banks, insurance companies, mutual funds and various other financial institutions.  Earnings accumulate within an IRA on a tax-deferred basis.  In some cases, the amount of the individual’s contribution to an IRA is deductable from his or her current taxable income.  When taking withdrawals from an IRA before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax. 

For IRA applications, contact your broker or call (973) 928-5400; Ext—302


Roth IRA

A Roth IRA is a nondeductible IRA meaning that it is funded with after-tax dollars.  There are several unique features: 

  • distributions from contributions are penalty-free

  • withdrawals of earnings after attaining age 59 ½ are not taxable or subject to 10% withdrawal penalty if the amounts have been left in the account for at least 5 years

  • withdrawals of earnings before 59½ may be subject to 10% federal penalty tax

  • the owner may continue to make contributions to the account after he or she is 70½

  • there is no required beginning date for withdrawals

For Roth IRA applications, contact your broker or call (973) 928-5400; Ext—302


401(k), 403(b), 457(b) Retirement Plans

These retirement plans all allow participants to defer compensation and the taxes associated with that compensation through a process of salary reduction within specified limits.


401(k):  A 401(k) plan is a type of profit sharing plan that allows qualified defined contributions and employee salary deferrals up to specified limits. 401(k) plans are protected under ERISA (Employee Retirement Income Security Act).


403(b):  A 403(b) plan is often referred to as a tax-deferred annuity or tax-sheltered annuity and is generally established by public education institutions or general public welfare organizations to provide employee salary deferrals up to specified limits.  If the employer makes contributions to the plan then the plan becomes subject to ERISA.


457(b):  A 457(b) plan is established by state and local governments and organizations exempt from federal income tax to provide employee salary deferrals up to specified limits.



Defined Benefit Pension Plans

A defined benefit pension plan is an employer funded qualified plan that provides a specific level of annual pension benefit at retirement to an employee.  The retirement benefit is determined by the plan’s benefit formula, the participant’s compensation and the participant’s years of service.  Many of these plans are backed by the Pension Benefit Guaranty Corporation.



A SEP (Simplified Employee Pension) and a SIMPLE (Savings Incentive Match Plan for Employees) combine IRA and defined contribution plan characteristics to meet the needs of small employers.


SEPs consist of individual IRAs of participants to which an employer may make contributions on behalf of all employees if they meet certain criteria.


SIMPLEs can be established as an IRA for each participant employee or as part of a 401(k). 


When taking withdrawals from these plans before age 59½, you may have to pay ordinary income tax plus a 10% federal penalty tax.  Additionally for SIMPLEs, withdrawals during the initial  2-year participation period may be subject to a 25% early withdrawal penalty tax.


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