Planning for your end-of-year financial goals
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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......

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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  • 1.
    • Planning for your
    • end-of-year financial goals
    • Jason Gross
    • Retirement Plan Consultant
    • Andrew Meadows
    • Relationship Manager
  • 2. 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
  • 3. 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
  • 4. 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
  • 5. 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
  • 6. 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
  • 7. Build your own future
    • Additional plan options:
    • New Comparability
    • Profit Sharing
    • Roth 401(k)
    • Safe Harbor
  • 8. Advantages of Safe Harbor
    • Maximize deductible contributions for top-tier employees and owners
    • Waive IRS compliance-testing requirements
    • Employer match: Boost morale and participation
  • 9. 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
  • 10. True cost of hidden fees
  • 11. 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
  • 12. 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?
  • 13. Contact a Retirement Plan Consultant
    • E-mail: [email_address]
    • Phone: 877.775.4015