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Highlight information is provided courtesy of Wall Street Online Advisory, a $399.00 moderately priced Flat Fee Investment Consultative Advisory Service for individuals, families, companies and organizations.
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Stocks, bonds, mutual funds, variable annuities, no load variable annuities, bonus variable annuities, equity indexed annuities etc. are NOT retirement plans by themselves; rather, they are investments that can be used as some of the possible funding vehicle inside of TAX DEFERRED retirement plans.
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Presently existing employer plans that are not satisfactory for whatever reason most likely can be changed, dropped or frozen and perhaps a "better" more appropriate plan can be instituted.
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The "best" most appropriate retirement plan for one organization might not be the "best" most appropriate plan for a similar organization.
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The choice of plans and rules associated with the plans are typically set by IRS rules; consequently, the rules which apply to the plans are typically universal for all of the same kind of designated plan offerings by mutual fund companies, brokers, banks, insurance companies, 3rd party administrators, etc.
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Tax deductibility on plan contributions and tax deferred growth within retirement plans is the "principal reason" why retirement plans are far more advantageous than using other "after-tax and taxable" strategies for creating assets. Effectively, it's simply the "use" of these "tax dollars" for compounding purposes that's the big advantage associated with having a retirement account versus using non tax deferred contributions and growth accounts. In our view, there is no other investment structure available which offers these distinct advantages. Please see The-Rule-of-72 found on left side of this site for an overview of this impact.
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Depending on how a business is structured, and depending on earned income levels, plans can be established where virtually all income can be contributed to a retirement plan.
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Depending on varying situations, several plans can be combined and or made available side by side in some organizations.
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Different plans provide very dramatic differences as to how company contributions are allocated amongst owners, long term employees, highly compensated, etc.
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Anyone who works and is under 70 ½ can have an IRA, for some participants the contribution is tax deductible.
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Most individuals are eligible for a ROTH IRA and many individuals are eligible to convert some or all of their IRAs into a ROTH IRA CONVERSION account.
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ALL corporations, not for profits, partnerships, sole proprietors, are potentially eligible and typically can have any of the following plans: SEP IRA, Company Simple IRA, Profit Sharing Plans, Aged Weighted Profit Sharing Plans, New Comparability Profit Sharing Plans, Defined Benefit Plans, 401Ks, 401k-Safe Harbor and many other type plans.
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Only corporations, not for profits, partnerships with less than 100 employees and no other retirement plan can have a Company Simple IRA, Company Simple 401K.
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Not For Profit organizations can have 403(B), 403B ERISA, 457 Plans, SEP IRA, Company Simple IRA, Profit Sharing Plans, Aged Weighted Profit Sharing Plans, New Comparability Profit Sharing, Defined Benefit Plans, 401Ks, 401k-Safe Harbor, 401K-Owner’s Only.
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Plans that typically provide the highest allowable tax deductible contributions, include: 412i Insured Defined Benefit Plans, Defined Benefit Plans, 401k-Defined Benefit Plans or other plans in combination.
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Plans that are exclusively funded by employer ONLY include: SEP IRA, Profit Sharing Plans, Aged Weighted Profit Sharing Plans, New Comparability Profit Sharing Plans, Defined Benefit Plans.
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Plans that can be exclusively funded by employee ONLY contribution include: 403(b) Non ERISA, 401K.
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Plans that are jointly funded by employer and employee include: Company Simple IRA, Company Simple 401K, 401Ks, 401K-Safe Harbor, 401K-Owner’s Only.
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Plans with 5500 filings, ERISA requirements, 3rd party administration, set-up and annual expense include: 403B ERISA, 457 Plans, Profit Sharing Plans, Aged Weighted Profit Sharing Plans, New Comparability Profit Sharing Plans, Defined Benefit Plans. 401Ks, 401K-Simple, 401K-Safe Harbor, 401K-Owner’s Only.
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Certain mutual funds and variable annuity companies offer turnkey all inclusive plans; others provide the investment only , which then require the services of outside, independent 3rd Party Administrators for 5500 filings, ERISA requirements, administration, plan documents and design.
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Company and organization plans with minimal plan administration and expense include: SEP-IRA, Company Simple IRA, 403(B).
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Plans typically affording the highest percent allocation of employer contribution to owners and other longer term employees include: Aged Weighted Profit Sharing Plans, New Comparability Profit Sharing Plans, Defined Benefit Plans.
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All Mutual Funds, Variable Annuities and Variable Life Insurance policies are offered by prospectus ONLY. For complete information including charges and expenses obtain a prospectus, and read it carefully before you invest.
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Mutual Fund, Variable Annuity and Variable Life prospectuses are available directly from the issuing companies which is included when product information is requested, and, in some cases, on the issuing company's internet website.
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The tax deferral characteristic associated with variable annuities is not needed when used in an account that is by definition is tax deferred (retirement accounts) and according to some sources variable annuities generally have higher fees and internal expenses than mutual funds.
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Systematic and dollar cost averaging within Mutual Funds, Variable Annuities and other investments does not assure a profit and does not protect against loss in declining markets. It involves continuous investment in securities regardless of fluctuating prices and the investor should consider his or her financial ability to continue purchases through periods of low price levels.
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Investing in stocks, bonds, mutual funds and variable annuities does not guarantee a profit. All of these investments can lose money.
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For specific information on how we can assist you in addressing a wide range of retirement plan related issues and concerns, please complete and transmit the form found below.
