5.2. Retirement Plans

Most of us would like to stop working at some point in our lives, preferably as soon as possible. In order to do this, we need to have saved a sufficient amount of money to live. To achieve this goal, many people rely on a financial retirement plan. A financial retirement plan is a formal way for working people to systematically save and invest money for retirement.

In the best of all worlds, every working person would have at least one retirement plan account that is set aside for accruing retirement funds. Such a retirement account may be employer-sponsored, meaning that it is organized and managed by the participant’s employer. Or it may be an individual plan that is managed by the participant or the participant’s agent, which might be an investment firm or a trust bank. Even though securities are often bought and sold within a retirement plan account, a retirement account itself is not a security. Any inves