For an updated list of available retirement plans and annual plan limits, reference our employee retirement plan chart.

Your company's employee retirement system offers benefits that Social Security and traditional savings accounts can't match.

The first benefit to an employee retirement system is the immediate impact it has on staff paychecks. Since you designate pre-tax dollars for 401k contributions, you lower your taxable income. The money comes directly out of paychecks before income taxes are deducted so you hardly miss the funds that work towards building retirement savings. The funds continue to grow tax-free and potential gains are not taxed until the participant reaches 59½ years of age.

Participants in an employee retirement system can also select where their money goes. They can choose from a variety of mutual funds, bonds, stocks, and money market accounts and determine if they wish to invest conservatively, moderately, or aggressively.

The amount workers defer into an employee retirement system is also up to them – they just need to stay within the limits of the plan. Through 2007, employees can contribute up to 15% of their annual earnings up to $15,500 with annual limit increases of $1,000 every year after that. While not everyone can afford to contribute the plan maximum, it's always a good idea to invest as much as possible because you have more buying power with pre-taxed dollars.

And the benefits of employee retirement systems aren't limited to just new entries into the workforce. 401k plans allow employees closer to retirement age to contribute more to their accounts. A catch up provision lets employees 50 years or older to invest up to an additional $4,000 each year.