Thursday, April 26, 2012
IS YOUR RETIREMENT PLAN RIGHT FOR YOUR SMALL BUSINESS?—PART 3
3:33 PM | 
Posted by
pensionfinancialservices |
The last of
three posts drawn from a Fidelity Viewpoints article on the various
options a small business has in choosing the right retirement plan takes an
at-a-glance look at a Self-Employed 401 (k) Plan.
Why would
you choose that?
Who’s it
For: Self-employed
individuals or business owners with no employees other than a spouse (and no
plans to add employees); available to sole proprietors, partnerships,
corporations, S corporations with no common law employees.
Key
advantages: Generous
contribution limits; no initial setup or annual maintenance fee.
Who
contributes:
Employer and employee (assuming the employee is the business owner or spouse).
Contribution
limits: Employer
can contribute up to 25% of compensation to a maximum of $50,000 for 2012;
employee (owner or spouse) can make salary deferral contributions of up to 100%
of compensation, not to exceed $17,000 for 2012; catch-up contributions of up
to $5,500 (2012) available for those age 50 or older; total of salary deferrals
and profit-sharing contributions cannot exceed 100% of compensation or $50,000
in 2012 if under age 50 or $55,500 if age 50 or older.
Vesting: Immediate.
Cost: No initial setup or annual
maintenance fee.
Access
to assets: Cannot take withdrawals from plan until a “trigger” event
occurs, such as termination of service or plan termination. Withdrawals are
subject to current federal income taxes and a possible 10% penalty if the
participant is under 59 and ½.
Contact us for any information on this type of plan:
Pension Parameters Financial Services, Inc.
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
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