Business Retirement Savings
When you want to provide for the owners, officers and employees of your company.
Why you should consider a retirement plan for your business:
- The employer is allowed a tax deduction for contributions
- All contributions are immediately 100% vested
- The owner directs the investments
- Self-employed individuals may use these to realize higher tax-deductible contributions than a traditional IRA
SEP IRAs – Simplified Employee Pensions
- The employer makes tax-deductible contributions to each eligible employee’s SEP IRA on a discretionary basis
- The maximum contribution cannot exceed 25% of the employee’s compensation, or $40,000, whichever is smaller
- Employees do not pay taxes on SEP contributions, but withdrawals are taxed when the employee receives a distribution from the SEP IRA.
- Each employee must establish a Traditional IRA to which the employer will make contributions; SEP IRAs are available for terms of 1 to 3 years, with fixed and variable rate options
SIMPLE IRAs – Savings Incentive Match Plan for Employees
- Eligible employees may set aside part of their pre-tax compensation as a contribution to the plan
- Employers are required to match employee contributions up to a certain dollar amount or a percentage of compensation
- Employers are allowed a tax deduction for contributions they make to the SIMPLE IRA plan.
- The employee's contributions are not taxed, but distributions from the SIMPLE IRA are.
