457 Plans

• A 457 deferred compensation plan defers money from your paycheck for future retirement income. The money gets placed into a retirement account which is invested in a variety of different investments chosen by your employer. These plans allow access to the funds anytime after age 55 without paying a penalty on the funds being distributed.
  
  

SEP IRA

• A SEP IRA is a Simplified Employee Pension. Your employer takes profits from the company and contributes them to your SEP IRA. You then direct the money, in the account, towards investments that you would like to invest in. You may not make withdrawals from your SEP IRA until age 59 1/2. These plans are assessed a 10 percent penalty on all withdrawals made before this age.
  
  

412i Plan

• A 412i plan is a fully insured pension plan. Your employer makes contributions to the 412i plan which must, in turn, invest in fixed life insurance and annuity policy contracts. You receive payments from the plan after age 59 1/2. The 10 percent penalty on withdrawals made prior to age 59 1/2 may be avoided, since withdrawals from the plan may be designed to conform to the IRS rule 72q exception for annuity policy withdrawals made prior to age 59 1/2.
  
  

Consideration

• Your employer's pension plan ultimately determines when you can retire. You cannot choose the investments your employer uses. However, you may invest your own money outside of your employer's pension plan. In cases where you want to retire early, prior to age 59 1/2, then you may wish to invest in a retirement account which is not tied to your employer like an IRA. IRAs give you the opportunity to invest in a wide range of investment products like mutual funds, precious metals, real estate, individual stocks and bonds. This personal savings then supplements your employer's pension benefit at retirement and gives you another layer of financial security.