Retirement Plans

There are almost as many retirement plans as there are flavors of ice cream! Each business' unique needs must be taken into account before deciding which plan is best. Some questions that should be answered are:

Do the plan costs outweigh the economic benefit to the business?
Are the owners discriminated against due to top-heavy rules?
Do I want a lot of "bells and whistles" in my retirement plan?

The table that follows attempts to give a brief overview of some of the most popular IRS qualified retirement plans available currently. It is not meant to provide all the rules that apply to a specific plan nor to be used to determine which plan is best for a specific business.

Plan Name
Employer Contribution
Employee(ee) Contribution
Vesting Schedule
Top-Heavy Rules
Annual IRS Reporting
SIMPLE IRA
2% for all ee's or 3% for Participants
100% to $6000
NO
NO
Simplified
SEP
Up to 15%, Max of $24,000
NONE
NO
NO
NO
SIMPLE 401(k)
2% for all ee's or 3% for Participants
Up to 25%, Max of $6,000
NO
NO
Full ERISA
Traditional 401(k)
Up to 15%, Max of $30,000
Up to $10,000
YES
YES
Full ERISA
Profit Sharing
Up to 15%, Max of $24,000
If part of 401(k)
YES
YES
Full ERISA
Cross Tested*
Up to 15%, Max of $30,000
If part of 401(k)
YES
YES
Full ERISA

* With this plan higher contributions are allowed for older and higher paid employees.

For further information on Retirement Plans Contact Us.