Retirement Plans
There are almost as many retirement plans as there are flavors of ice cream! Each business' unique needs must be taken into account before deciding which plan is best. Some questions that should be answered are:
Do the plan costs outweigh the economic benefit to the business?
Are the owners discriminated against due to top-heavy rules?
Do I want a lot of "bells and whistles" in my retirement plan?
The table that follows attempts to give a brief overview of some of the most popular IRS qualified retirement plans available currently. It is not meant to provide all the rules that apply to a specific plan nor to be used to determine which plan is best for a specific business.
|
Plan Name
|
Employer Contribution
|
Employee(ee) Contribution
|
Vesting Schedule
|
Top-Heavy Rules
|
Annual IRS Reporting
|
|
SIMPLE IRA
|
2% for all ee's or 3% for Participants
|
100% to $6000
|
NO
|
NO
|
Simplified
|
|
SEP
|
Up to 15%, Max of $24,000
|
NONE
|
NO
|
NO
|
NO
|
|
SIMPLE 401(k)
|
2% for all ee's or 3% for Participants
|
Up to 25%, Max of $6,000
|
NO
|
NO
|
Full ERISA
|
|
Traditional 401(k)
|
Up to 15%, Max of $30,000
|
Up to $10,000
|
YES
|
YES
|
Full ERISA
|
|
Profit Sharing
|
Up to 15%, Max of $24,000
|
If part of 401(k)
|
YES
|
YES
|
Full ERISA
|
|
Cross Tested*
|
Up to 15%, Max of $30,000
|
If part of 401(k)
|
YES
|
YES
|
Full ERISA
|
* With this plan higher contributions are allowed for older and higher paid employees.
For further information on Retirement Plans Contact Us.