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Information for Small Businesses

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Three Considerations for Small Business Owners When Implementing a Retirement Plan - Abstract: Business owners looking to implement a new qualified retirement plan -- like a 401k plan or a cash balance plan -- for the 2016 calendar year must have the plan document signed by 12/31/2016 for the earliest allowable effective date of 01/01/2016. Here are some important points to consider about this deadline.

Small Business Owners Rethinking Retirement Benefits to Retain, Recruit Employees - Abstract: In new research, small business owners are finding that the implementation of the Affordable Care Act has decreased the appeal of health care benefits to employees and increased retirement plans' importance as a tool to recruit and retain employees.

Four Steps Towards Establishing a Small Business Retirement Plan - Abstract: A recent survey found that 26% of small business owners aren't confident about their retirement savings. Establishing a retirement plan is key to retirement confidence. Article provides some practical steps to move you towards establishing a retirement plan.

Reduce Your Tax Burden With Retirement Plans - Abstract: As another tax season comes to an end, most business owners are feeling the burden of an ever escalating tax environment and in most cases are asking, "How can I reduce my tax liability next year?" Two solutions that could help alleviate some of their next "tax bill" are starting a 401k plan or reviewing their current plan design to see if it can be enhanced.

Resources

Directory of Solo 401k and Small Business Retirement Plan Providers: Click here to download.
Solo 401k Calculator available here.
A glossary retirement plan and investment terms available here.


401k Plans for Sole Proprietorships

Regulatory reform now allows Sole Proprietorships to set-up and contribute to a 401k plan. These are often called Solo 401k or Individual(k) plans. A number of vendors are beginning to market specific plans to meet this need.

We have put together a list of providers that offer these plans. Click here to obtain a copy of this list.

Calculator available. Click here to calculate how much you can contribute to a Solo 401k in comparison to a SEP or SIMPLE plan which have different limits.

General Features of a Solo 401k Plan:

Plan Establishment Sole proprietors with no additional employees other than the spouse of the proprietor or partnerships whose only employees are self-employed partners and their spouses.
Trustee and Plan Administrator Business Owner, Spouse or Partner or any combination, or any other designated third party.
Salary Deferral
Contributions
Up to $18,000 (not to exceed 100% of pay and no more than $265,000 of pay can be taken into account). Total salary deferral and employer maximum is $53,000.
Catch-up
Contributions
Individuals age 50 or older may contribute an additional $6,000 in salary deferrals beyond the $18,000 which does not count towards the maximum total contribution limit of $53,000.
Employer Contributions Up to 25% of pay (20% for self-employed) to a maximum of $53,000. Salary deferral contributions are also counted towards this limit.
Rollovers Rollovers and transfers allowed from traditional IRA, SEP, Qualified Plans or Keoghs (Profit Sharing, Money Purchase Pension, Defined Benefit), 401k, 403(b) and governmental 457 plans. SIMPLE IRAs are eligible for rollover after two year holding period is met.
Loans Available to all participants, including unincorporated business owners.
Government Reporting IRS 5500-EZ.

 

401k plans are subject to numerous and complex rules, regulations and tax qualification requirements. Be sure to consult with a qualified professional before making any decisions.



Information on Small Business Plans

Starting a small business retirement savings plan can be easier than you think. Here are some resources on a varity of retirement plans available to the small business person.

Employer Retirement Plans Comparison Chart for Small Businesses - Summary: This chart provides a comparison of the features and benefits that apply to retirement plans that can be sponsored/adopted by small business owners. Focus is on the areas that are important to the business owner to ensure that the plan that is chosen is the plan that is most suitable for the business.

Retirement Plan Comparison Chart

IRS Publication 560, Retirement Plans for Small Business.

DOL's 401k Plans for Small Businesses

401k Plans for Small Businesses

Choosing a Retirement Plan for Your Small Business - Summary: In this piece you will find a chart outlining the advantages of each of the most popular types of IRA-based and defined contribution plans and an overview of a defined benefit plan.

Retirement Plans FAQs Regarding SEPs

FAQs Regarding SIMPLE IRA Plans

SEP IRA Quick Reference Guide

SEP Retirement Plans For Small Businesses

SEP Vs SIMPLE IRA - Summary: This reference guide provides a comparison of some of the key features and benefits of these plans.

SIMPLE 401k Plans

SIMPLE IRA vs SIMPLE 401k's

Simple IRA Plans for Small Businesses


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