Monday, April 23, 2012
IS YOUR RETIREMENT PLAN RIGHT FOR YOUR SMALL BUSINESS?—PART 2
7:46 PM | 
Posted by
pensionfinancialservices |
Staying competitive in terms of attracting and keeping good employees, along with potential tax benefits, are among the reasons that argue for a small-business retirement plan, according to a detailed Fidelity Viewpoints article. The second of three posts drawn from the piece on the three plans that are “generally more suitable for very small businesses—typically 10 employees or less” takes an at-a-glance look at a Savings Incentive Match Plan for Employees (SIMPLE IRA).
Who’s it For: Companies with 100 employees or fewer that do not have any other retirement plan; available to sole proprietors, partnerships, corporations, S corporations.
Key advantages: Salary reduction plan with less administration;
Who contributes: Employer and employee.
Contribution limits: Employer can either match employee contributions dollar for dollar up to 3% of compensation or $11,500 for 2012, or contribute 2% of each eligible employee’s compensation; employee contributes up to 100% of compensation through salary deferral, not to exceed $11,500 for 2012; catch-up contributions of up to $2,500 (2012) available for those age 50 or older.
Vesting: Immediate.
Cost: Low-cost option of $350 plan fee or $25 per participant.
Access to assets: Withdrawals any time. If employee is under age 59 and ½, withdrawals may be subject to a 25% penalty if taken within the first two years of beginning participation, and a possible 10% penalty if taken after that time period.
In the next post, the Fidelity Viewpoints article reviews various aspects of a Self-Employed 401(k).
How can you decide which is best for you? Ask your retirement advisor, which is exactly why you should call:
28 West 44th Street
New York, NY 10036
Phone: (212) 675-9360 Fax: (212) 675-9363
New York, NY 10036
Phone: (212) 675-9360 Fax: (212) 675-9363
675 Line Road
Aberdeen, NJ 07747
Phone: (732) 583 -1313 Fax: (732) 583-6991
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment