Planning for your end-of-year financial goals Jason Gross Retirement Plan Consultant Andrew Meadows Relationship Manager

Planning for your

end-of-year financial goals

Jason Gross

Retirement Plan Consultant

Andrew Meadows

Relationship Manager

What you’ll learn today Reasons to set up a retirement plan Retirement plan options to consider Guidelines for selecting the right plan Questions to ask 401(k) plan providers Steps to get your plan started

Reasons to set up a retirement plan

Retirement plan options to consider

Guidelines for selecting the right plan

Questions to ask 401(k) plan providers

Steps to get your plan started

401(k) basics Suitable for any size employer Multiple contribution sources: Employee deferrals, employer match and profit-sharing Employee contribution limits for 2009 $16,500 - Annual deferral limit $22,000 - Participants age 50 and over

Suitable for any size employer

Multiple contribution sources: Employee deferrals, employer match and profit-sharing

Employee contribution limits for 2009

$16,500 - Annual deferral limit

$22,000 - Participants age 50 and over

Why 401(k)? *Higher contribution limits than other retirement plans* Retirement Plan Contribution limit Catch-up 401(k) Up to $49,000* $5,500 SIMPLE Up to $11,500 $2,500 SEP IRA Up to $49,000 (but no n/a more than 25% of income) Roth IRA Lesser of $5,000 $1,000 or taxable compensation *Includes employee and employer contributions

*Higher contribution limits than other retirement plans*

Retirement Plan Contribution limit Catch-up

401(k) Up to $49,000* $5,500

SIMPLE Up to $11,500 $2,500

SEP IRA Up to $49,000 (but no n/a

more than 25% of income)

Roth IRA Lesser of $5,000 $1,000

or taxable compensation

*Includes employee and employer contributions

Benefits of a 401(k) Employers Reduce taxable income $500 small business tax credit (first three years) No match required Attract and retain quality workforce Employees Reduce taxable income Account grows tax deferred Easy to save at work Potential employer match

Employers

Reduce taxable income

$500 small business tax credit (first three years)

No match required

Attract and retain quality workforce

Employees

Reduce taxable income

Account grows tax deferred

Easy to save at work

Potential employer match

Tax Savings Example Business owner over age 50 makes $110k annually 401(k) with Safe Harbor and Profit Sharing - $49,000 contribution limit Administrative expenses, employer/employee contributions are tax deductible * 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

Business owner over age 50 makes $110k annually

401(k) with Safe Harbor and Profit Sharing - $49,000 contribution limit

Administrative expenses, employer/employee contributions are tax deductible

Build your own future Additional plan options: New Comparability Profit Sharing Roth 401(k) Safe Harbor

Additional plan options:

New Comparability

Profit Sharing

Roth 401(k)

Safe Harbor

Advantages of Safe Harbor Maximize deductible contributions for top-tier employees and owners Waive IRS compliance-testing requirements Employer match: Boost morale and participation

Maximize deductible contributions for top-tier employees and owners

Waive IRS compliance-testing requirements

Employer match: Boost morale and participation

Know the true cost of a 401(k) Costs should be provided right upfront Beware the hidden fees! Flat vs. asset-based fees Illustration: Mark Matcho

Costs should be provided right upfront

Beware the hidden fees!

Flat vs. asset-based fees

True cost of hidden fees

Guidelines for selecting a plan Determine your primary goals - Save on taxes? - Maximize personal retirement contributions? - Provide benefit for employees? Match plan features/benefits to your goals - How much can you save? - What are your employee demographics? - How investment-savvy are you? Compare plan providers

Determine your primary goals

- Save on taxes?

- Maximize personal retirement contributions?

- Provide benefit for employees?

Match plan features/benefits to your goals

- How much can you save?

- What are your employee demographics?

- How investment-savvy are you?

Compare plan providers

Questions to ask a plan provider How much does your product cost? Do you charge asset-based fees? Do you provide ongoing customer support? How long does it take to set up a plan? What type of education will you provide to my employees?

How much does your product cost?

Do you charge asset-based fees?

Do you provide ongoing customer support?

How long does it take to set up a plan?

What type of education will you provide to my employees?

Contact a Retirement Plan Consultant E-mail: [email_address] Phone: 877.775.4015

E-mail: [email_address]

Phone: 877.775.4015