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Retirement
plans are an excellent way to defer income, save for retirement,
and provide incentives to retain employees. That said, it's
imperative to make sure that you follow the rules to take advantage
of all the benefits they offer. See below for specific questions
to help you get familiar with retirement plans.
These
calculators
will help you with making retirement related decisions
PLANS IN GENERAL
What kind of retirement plans are there?
What is a qualified plan?
How much does it cost to set up a plan?
Is there way to have a plan without administration costs?
Can I borrow money from my plan?
What happens if IRS disqualifies my plan?
CONTRIBUTIONS
How much can I put in my retirement plan?
Do I have to make contributions for all my employees?
DISTRIBUTIONS
What are minimum distributions?
When do I have to take money out of my plan?
TERMINATIONS
What happens if I close down my plan?
What happens if IRS disqualifies my plan?
PENALTIES
Is there a penalty for taking my money out before 59 1/2?
What kind of retirement plans are there?
Defined Contribution Pension Plan
Defined Contribution Profit Sharing Plan
Defined Benefit Plan
SEP (Simplified Employee Plan)
IRA (Individual Retirement Account)
SIMPLE (Simplified )
What is a qualified plan?
A qualified plan has rules requiring minimum participation, vesting,
contribution, distribution, termination, and reporting rules.
Defined contribution and defined benefit plans are qualified plans.
How much does it cost to set up a plan?
Cost of plans differ depending on their complexity. Defined
benefit and defined contribution plans have an initial set up cost.
They also have annual reporting requirements that incurs administration
fees. Defined benefit plans also have an annual actuarial cost.
IRAs, SIMPLEs and SEPs have no formal reporting requirements or
administration fees. There are usually periodic fees that
need to be paid to investment advisors in the form of commissions
and/or management fees.
Is there a way to have a plan without
administration costs?
IRAs, SIMPLEs and SEPs have no formal reporting requirements, so
there are no administration fees. There are usually
periodic fees that need to be paid to investment advisors in the
form of commissions and/or management fees.
Can I borrow money from my plan?
Employers can allow the qualified plan they sponsor to allow loans
to be made to plan participants.
What happens if IRS disqualifies my plan?
If the rules are not followed, IRS can disqualify the plan.
This means they can disallow all the tax benefits.
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