Planning for your end-of-year financial goals


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A 401(k) plan is no longer a benefit reserved exclusively for major companies. Now, small businesses and their employees can also enjoy the same advantages of a big-business retirement plan in helping them achieve their long-term financial goals. Find out more about the benefits of a 401(k) for your small business and get some tips on what you should look for when shopping for a plan provider.

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  • Mention that New Comp, profit-sharing and Roth are options that are only available through our Custom(k) plan -? AM
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  • Planning for your end-of-year financial goals

    1. 1. <ul><li>Planning for your </li></ul><ul><li>end-of-year financial goals </li></ul><ul><li>Jason Gross </li></ul><ul><li>Retirement Plan Consultant </li></ul><ul><li>Andrew Meadows </li></ul><ul><li>Relationship Manager </li></ul>
    2. 2. What you’ll learn today <ul><li>Reasons to set up a retirement plan </li></ul><ul><li>Retirement plan options to consider </li></ul><ul><li>Guidelines for selecting the right plan </li></ul><ul><li>Questions to ask 401(k) plan providers </li></ul><ul><li>Steps to get your plan started </li></ul>
    3. 3. 401(k) basics <ul><li>Suitable for any size employer </li></ul><ul><li>Multiple contribution sources: Employee deferrals, employer match and profit-sharing </li></ul><ul><li>Employee contribution limits for 2009 </li></ul><ul><ul><li>$16,500 - Annual deferral limit </li></ul></ul><ul><ul><li>$22,000 - Participants age 50 and over </li></ul></ul>
    4. 4. Why 401(k)? <ul><ul><li>*Higher contribution limits than other retirement plans* </li></ul></ul><ul><li>Retirement Plan Contribution limit Catch-up </li></ul><ul><ul><li>401(k) Up to $49,000* $5,500 </li></ul></ul><ul><ul><li>SIMPLE Up to $11,500 $2,500 </li></ul></ul><ul><ul><li>SEP IRA Up to $49,000 (but no n/a </li></ul></ul><ul><ul><li>more than 25% of income) </li></ul></ul><ul><ul><li>Roth IRA Lesser of $5,000 $1,000 </li></ul></ul><ul><ul><li> or taxable compensation </li></ul></ul><ul><ul><li>*Includes employee and employer contributions </li></ul></ul>
    5. 5. Benefits of a 401(k) <ul><li>Employers </li></ul><ul><li>Reduce taxable income </li></ul><ul><li>$500 small business tax credit (first three years) </li></ul><ul><li>No match required </li></ul><ul><li>Attract and retain quality workforce </li></ul><ul><li>Employees </li></ul><ul><li>Reduce taxable income </li></ul><ul><li>Account grows tax deferred </li></ul><ul><li>Easy to save at work </li></ul><ul><li>Potential employer match </li></ul>
    6. 6. Tax Savings Example <ul><li>Business owner over age 50 makes $110k annually </li></ul><ul><li>401(k) with Safe Harbor and Profit Sharing - $49,000 contribution limit </li></ul><ul><li>Administrative expenses, employer/employee contributions are tax deductible </li></ul>* Assuming tax bracket of 35% REAL TAX SAVINGS (BUSINESS AND INDIVIDUAL) = OVER $17,000* Credit/Deduction Amount Credit/Deduction Details Tax Credit $500 $500 per year for the first three years of a new 401(k) plan 401(k) Administrative Fee $1,980 100% tax deductible Personal deferrals $22,000 $16,500 maximum; $22,000 for those over age 50 Safe Harbor and Profit-Sharing Contributions $27,000 Tax deductible up to 25% of total company compensation
    7. 7. Build your own future <ul><li>Additional plan options: </li></ul><ul><li>New Comparability </li></ul><ul><li>Profit Sharing </li></ul><ul><li>Roth 401(k) </li></ul><ul><li>Safe Harbor </li></ul>
    8. 8. Advantages of Safe Harbor <ul><li>Maximize deductible contributions for top-tier employees and owners </li></ul><ul><li>Waive IRS compliance-testing requirements </li></ul><ul><li>Employer match: Boost morale and participation </li></ul>
    9. 9. Know the true cost of a 401(k) <ul><li>Costs should be provided right upfront </li></ul><ul><li>Beware the hidden fees! </li></ul><ul><li>Flat vs. asset-based fees </li></ul>Illustration: Mark Matcho
    10. 10. True cost of hidden fees
    11. 11. Guidelines for selecting a plan <ul><li>Determine your primary goals </li></ul><ul><li>- Save on taxes? </li></ul><ul><li>- Maximize personal retirement contributions? </li></ul><ul><li>- Provide benefit for employees? </li></ul><ul><li>Match plan features/benefits to your goals </li></ul><ul><li>- How much can you save? </li></ul><ul><li>- What are your employee demographics? </li></ul><ul><li>- How investment-savvy are you? </li></ul><ul><li>Compare plan providers </li></ul>
    12. 12. Questions to ask a plan provider <ul><li>How much does your product cost? </li></ul><ul><li>Do you charge asset-based fees? </li></ul><ul><li>Do you provide ongoing customer support? </li></ul><ul><li>How long does it take to set up a plan? </li></ul><ul><li>What type of education will you provide to my employees? </li></ul>
    13. 13. Contact a Retirement Plan Consultant <ul><li>E-mail: [email_address] </li></ul><ul><li>Phone: 877.775.4015 </li></ul>
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