401(k) Tax Deferred and Profit Sharing plans for small to medium sized businesses
We offer defined contribution plans, such as 401(k)s. Contributions into these retirement plans can either be made with or without paying federal and state taxes. In traditional 401(k) plans, employees elect to have a set amount of money redirected from their paychecks to their 401(k) accounts prior to federal or state taxes being calculated and deducted. The contributions will grow tax deferred until the money is withdrawn, at which time federal and state taxes will be owed.
Profit sharing plans plans provide direct or indirect payments to employees' retirement accounts that are based on a company's profitability. These contributions are generally based upon the previous year's profitability of the company. For instance, if a company’s annual net profits increase by 5 percent over the previous year, the company might elect to contribute 5 percent of the companies payroll to the profit sharing participants on a pro rata basis. The company contributions are totally at the discretion of the company. These plans are almost always used in conjunction with 401(k)s so that employees can voluntarily make contributions from their earnings in addition to receiving profit sharing contributions from their employer.
Both of these plans offer a broad spectrum of investment choices in stocks, bonds and guaranteed investment options. These plans do come with fiduciary responsibility for the companies that sponsor them for their employees. We work with the plan sponsors to reduce liability to the lowest levels possible through training for company administrators of the plan, employee educational and investment counseling, periodic review of the plan documents, and systematic monitoring of the investment options.
403(b) plans for not-for-profit organizations and school districts
We offer tax-sheltered annuities and mutual fund retirement programs through a variety of well known providers to get the most suitable plan for your employees. These plans can be designed with both employer and employee contributions or with only employee contributions. The plans with only employee contributions are designed to supplement their institution or state sponsored pension plan. In these types of plans, employees elect to have a set amount of money redirected from their paychecks to their 401(k) accounts prior to federal or state taxes being calculated and deducted. Though most plans are tax deferred, Some plans allow participants to make after tax contributions, where the growth in the account is not taxed, and withdrawals at retirement will be tax free.
IRA’s for Businesses and Individuals
We offer multiple types of Individual Retirement Accounts (IRAs): Traditional, Roth, Simplified Employee Pension (SEP), and Savings Incentive Match Plan for Employees (SIMPLE). The type of account we recommend depends upon the specific circumstances of our client. For instance, SIMPLE IRA’s are ideal for businesses with varying cash flows and less than 100 employees, that need a retirement plan which does not have administrative expenses. The employer typically matches each employee's contributions up to 3% of the employee's salary. These contributions are immediately vested in the employee’s accounts.
Defined Benefit Plan
Under a defined benefit plan, the employer promises a specified monthly benefit upon retirement. A cash balance plan, one type of defined benefit plan, defines the promised benefit in terms of a stated account balance. In the private sector, the plan is usually funded through employer contributions. Companies must make contributions to the plan annually and must hire an actuary to calculate the required contribution annually.
Target Benefit Plans
A target benefit plan is similar to a defined benefit plan since contributions are based on projected retirement benefits. However, unlike a defined benefit plan, the benefits provided to participants at retirement are based on the performance of the investments, and are therefore not guaranteed.