Retirement Planning
Not every employee requires a Selective Employee Benefit program. Still... you value their effort and commitment all the same.
So you can help them save for tomorrow -- and reduce your business taxes today -- by setting up a traditional qualified retirement plan . Here are the most common ones:
401(k) Plans
- Employees can defer up to $13,000 per year under current income tax law, plus an additional $3,000 if age 50 or more.
- Employers can match a percentage of employee deferrals.
- Funds contributed to the plan are not currently taxable to the employee and accumulate tax deferred.
- Funds contributed by the employer are tax deductible.
Simplified Employee Pension Plans (SEPs)
- Employer can contribute up to 25% of pay not to exceed $41,000.
- Contributions are determined each year by the employer.
- You can skip a contribution in any given year.
- All eligible employees must participate.
- Employees are immediately 100% vested.
- Funds contributed by the employer are tax deductible.
- Funds contributed to the plan are not currently taxable to the employee and accumulate tax deferred.
- Each employee decides how and where his or her funds are invested.
Savings Incentive Match Plan for Employees (SIMPLE IRAs)
- Employees can contribute 100% of pay up to $9,000 per year, plus an additional $1,500 if age 50 or more.
- Employers can choose to match 100% of contributions up to 3% of income for participating employees, or 2% for all eligible employees, regardless of participation.
- No discrimination test and no federal reporting.
- Employees are immediately 100% vested.
- Funds contributed by the employer are tax deductible.
- Funds contributed to the plan are not currently taxable to the employee and accumulate tax deferred.
- Each employee decides how and where his or her funds are invested.
Setting up your Qualified Retirement Plan
In today's competitive marketplace, you need to offer a good benefits package to attract and retain quality employees. A Qualified Retirement Plan should be one of those benefits. Your financial representative can give you the expert guidance you need.
This information should not be construed as tax advice applicable to each individual. Please consult a qualified tax advisor regarding your individual circumstances.
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