Small Business Retirement Plans

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Small Business Retirement Plans
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Agenda

• Different Types of Plans
• Summary

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Different Types of Plans

• SIMPLE IRA
• SEP-IRA
• SOLO-401(k)
• Safe-Harbor 401(k)

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SIMPLE-IRA

• Savings Incentive Match PLan for Employees
• Very little paperwork to start and very easy to
  administer
• No annual filings with the IRS
• Start-up and ongoing cost very low
• Employees elect to defer part of their salary
  into an IRA account up to 10,000 (12,500 if
  over 50)
• Mandatory company match (generally 3) every year
• Overall limit between employee contributions and
  employer match of 20k (25k if over 50)
• Cannot have more than 100 employees
• Employee is 100 vested immediately in his / her
  account
• Must be the only retirement plan company has
• Must set up plan by Oct 1st.

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SEP-IRA

• Simplified Employee Pension
• Very little paperwork to start and very easy to
  administer
• No annual filings with the IRS
• Start-up and ongoing cost very low
• Completely funded by the company via a uniform
  contribution rate no employee salary deferrals
• Can allow for a higher contribution than a SIMPLE
  in most instances
• Maximum contribution (Lesser of 25 of salary or
  44k) No benefit for being over 50 with SEP
• Employer can decide whether to make contributions
  year-to-year
• No limit on number of employees
• Employee is immediately 100 vested in his / her
  account
• Can set up plan as late as tax return deadline
  (including extensions)

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SOLO-401(k)

• More paperwork and administrative issues
• Required annual filings with the IRS once assets
  hit 100k
• Higher start-up and ongoing costs
• Employees elect to defer part of their salary
  into an account up to 15,000 (20,000 if over
  50)
• Discretionary company match up to 25 of eligible
  compensation
• Overall limit between employee contributions and
  employer match of 44k (49k if over 50)
• Can allow for a higher contribution than a SIMPLE
  SEP in most instances
• Most plans allow loans Cannot do with SIMPLE
  SEP
• Limit on number of employees Only Husband
  Wife
• Employee is immediately 100 vested in his / her
  account
• Must set-up by end of your tax year generally
  Dec. 31st

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Safe Harbor 401(k)

• More paperwork and administrative issues than
  SIMPLE SEP, but not as bad as a regular 401(k)
• Required annual filings with the IRS
• Higher start-up and ongoing costs
• Employees elect to defer part of their salary
  into an account up to 15,000 (20,000 if over
  50)
• Mandatory company match (3-4)
• Can allow for a higher contribution than a SIMPLE
  SEP in most instances
• Most plans allow loans Cannot do with SIMPLE
  SEP
• No Limit on of employees
• Employee is immediately 100 vested in his / her
  account
• Must set-up by end of your tax year generally
  Dec. 31st

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Summary
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Summary
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Summary