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Retirement & Financial Planning

Retirement Planning

Unlike their parent's generation, which could depend upon pensions and Social Security to provide a comfortable retirement, starting with the boomer generation, the retirement safety net once provided by society is disappearing. Social Security is underfunded beginning in 2017, and with the disappearance of defined benefit pensions, employees have been left to provide for themselves. Today more than ever, a 401K is the most important vehicle for retirement savings. Life expectancies continue to increase, meaning that today's worker over the age of 50 can expect to enjoy a 20 to 30 year retirement.

Planning for the future is more important than ever.

Profit Sharing Plans

Available to all businesses. Can be funded solely by the employer or both the employee and employer. Typical eligibility requirements include employees age 21, with one year of service and 1,000 hours. The contribution amount is discretionary, but the maximum is 25% of the employee's compensation, up to $53,000. Employer contributions can be subject to a vesting schedule. The plan is not subject to ADP testing, but is subject to Top Heavy and 415 testing and also government reporting.

Also available are Simple IRAs and SEP IRAs, which require 100% employee immediate vesting for employer contributions.

Forms required to quote:

401K Plans

Available to all businesses except government agencies. This plan provides for pre-tax retirement savings with investment flexibility. Employees are eligible after age 21 with one year of service and 1,000 hours. The maximum allowed employee contribution is $18,000. The maximum employer contribution is 25% of the eligible employee's compensation, up to $53,000. Employer contributions can be made subject to a five year vesting schedule. The 401K plan is subject to fiscal year end testing, ADP, Top Heavy, 415, and government reporting.

Safe Harbor 401K

Similar to a 401K plan, except the employee is immediately 100% vested for all employer contributions. This plan is not subject to ADP and Top Heavy testing, though it must still meet 415 testing requirements and file government reports. A Safe Harbor 401K plan must be established at least 3 months before the end of the fiscal year.

Executive Compensation Plans

Non-qualified plans, which solve the problem of allowing valuable key employees to save in excess of the qualified (401K) retirement plan limitations. In many small businesses, retirement plan contributions of both the owners and key employees can be limited due to year end testing issues (ADP, Top Heavy). In these plans, earnings accumulate tax-deferred and there is no contribution limit - up to 100% of compensation can be contributed. To obtain a quotation, please download and complete the Census and Financial Analysis documents. Please note that the Deferred Compensation links are MS Word documents and are not included in the Excel spreadsheet.

Contact us to speak with a retirement and financial planning consultant for your businesses.