{"id":3113,"date":"2019-03-04T22:37:40","date_gmt":"2019-03-04T22:37:40","guid":{"rendered":"https:\/\/tucsonalist.com\/new\/?p=3113"},"modified":"2019-03-04T22:37:40","modified_gmt":"2019-03-04T22:37:40","slug":"choosing-a-retirement-plan-that-fits-your-business-premiere-wealth-advisors","status":"publish","type":"post","link":"https:\/\/tucsonalist.com\/new\/choosing-a-retirement-plan-that-fits-your-business-premiere-wealth-advisors\/","title":{"rendered":"Choosing a Retirement Plan that Fits Your Business-Premiere Wealth Advisors"},"content":{"rendered":"

Choosing a Retirement Plan that Fits Your Business<\/h1>\n
One survey found that 79% of small business owners expect at least some of their retirement income to come from tax-advantaged retirement savings accounts.\u00b9 If you have yet to develop a retirement plan for your business, or if you’re not sure the plan you’ve chosen is the right one, here are some things to consider.<\/p>\n

How much can my business afford to contribute?<\/h2>\n

The cost of contributions may be managed by the plan type.<\/p>\n

A simplified employee pension plan (SEP) is funded by employer contributions only. SEP contributions are made to separate IRAs for eligible employees.\u00b2<\/p>\n

Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRAs blend employee and employer contributions.\u00b3 Employers either match employee contributions up to 100% of the first 3% of compensation, or contribute 2% of each eligible employee\u2019s compensation.<\/p>\n

A 401(k) is primarily funded by the employee; the employer can choose to make additional contributions, including matching contributions.\u2074<\/p>\n

A defined benefit plan is entirely funded by employer contributions.\u2075<\/p>\n

What plan accommodates high employee turnover?<\/h2>\n

The cost of covering short-tenured employees may be reduced by eligibility requirements and vesting.<\/p>\n

With the SEP-IRA, only employees who are at least 21 years old\u00a0and have been employed in three of the last five years must be covered.<\/p>\n

The SIMPLE IRA must cover employees who have earned at least $5,000 in any prior two years and are reasonably expected to earn $5,000 in the current year.<\/p>\n

The 401(k) and defined benefit plan must cover all employees who are at least 21 years of age and who worked at least 1,000 hours in a previous year.<\/p>\n

Vesting is immediate on all contributions to the SEP-IRA, SIMPLE IRA and 401(k) employee deferrals, while a vesting schedule may apply to 401(k) employer contributions and defined benefits.<\/p>\n

Do I want to maximize contributions for myself (and my spouse)?<\/h2>\n

The SEP-IRA and 401(k) offer higher contribution maximums than the SIMPLE IRA. For those business owners who are starting late, a defined benefit plan may offer even higher levels of allowable contributions.<\/p>\n

My priority is to keep administration easy and inexpensive.<\/h2>\n

The SEP-IRA and SIMPLE IRA are straightforward to establish and maintain. The 401(k) can be more onerous, but complicated testing may be eliminated by using a Safe Harbor 401(k). Generally, the defined benefit plan is the most complicated and expensive to establish and maintain of all plan choices.<\/p>\n

 <\/p>\n

    \n
  1. Gallup, March 16, 2017<\/li>\n
  2. Like a traditional IRA, withdrawals from a SEP-IRA are taxed as ordinary income and, if taken before age 59\u00bd, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70\u00bd, you must begin taking required minimum distributions (RMDs).<\/li>\n
  3. Like a traditional IRA, withdrawals from SIMPLE IRAs are taxed as ordinary income and, if taken before age 59\u00bd, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70\u00bd, you must begin taking required minimum distributions (RMDs).<\/li>\n
  4. Distributions from 401(k) plans are taxed as ordinary income and, if taken before age 59\u00bd, may be subject to a 10% federal income tax penalty. Generally, you must begin taking required minimum distributions no later than April 1 of the year after you reach age 70\u00bd.<\/li>\n
  5. Distributions from defined benefit plans are taxed as ordinary income and, if taken before age 59\u00bd, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70\u00bd, you must begin taking required minimum distributions.https:\/\/www.premret.com\/<\/a><\/li>\n<\/ol>\n<\/section>\n","protected":false},"excerpt":{"rendered":"

    Choosing a Retirement Plan that Fits Your Business One survey found that 79% of small business owners expect at least some of their retirement income to come from tax-advantaged retirement savings accounts.\u00b9 If you have yet to develop a retirement plan for your business, or if you’re not sure the plan you’ve chosen is the…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[],"class_list":["post-3113","post","type-post","status-publish","format-standard","hentry","category-tucson-business-news","category-37","description-off"],"yoast_head":"\nChoosing a Retirement Plan that Fits Your Business-Premiere Wealth Advisors - Tucson A List<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/tucsonalist.com\/new\/choosing-a-retirement-plan-that-fits-your-business-premiere-wealth-advisors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Choosing a Retirement Plan that Fits Your Business-Premiere Wealth Advisors - 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