A Look at Retirement Plans

Updated 8 months ago

Tax time often makes one think, how can I save some cottin’ pickin’ taxes? Well, retirement plans may save you some tax while saving and investing for your future. And that’s awesome!Plans for businesses can benefit the business entity and the individuals who contribute. Here’s how the most common plans work Because retirement plans are primarily overseen my the IRS because of the tax benefits it can be a confusing maze of information. So you need to speak with your financial advisor or tax preparer to determine what vehicle is best for you. SEP IRA – if you are self-employed, or a corporation with strong profits this might be a great vehicle for you. The money contributed is from the business and not from the individual, unlike a 401k you may have had at another job. When you work my yourself, that distinction may be complicated and confusing but SEP IRA allows up to potentially $49,000 to be contributed pre-tax. Definitely determine your particular situation, but with low administrative costs this is a viable retirement in the right situation.SIMPLE IRA- this plan is set up with the owners and an advisor usually using a single mutual fund company (or a family of funds) for all who wish to invest. SIMPLE plans allow employee contributions and mandate a corporate contribution. They are several options in setting these up but in my experience they are usually set up so that only participating employees get the match. But SIMPLE can be set up so that EVERYONE who is eligible gets a flat 2% corporate contribution regardless of employee participation. At the beginning of each year, the employer determines if they will contribute 2 % of each eligible employee’s earnings or if they will match participating employees’ contributions to 3% of the gross earnings of participating employees will be matched each year. There are details that you should check on before choosing this plan. But it, too, is an inexpensive plan to administer as each employee generally is responsible for their account costs and investment options. I work with my businesses and their employees to help them choose investments that work for their goals and objectives.401(k) + Solo 401(k)- 401k’s allow contributions for employers AND employees but have higher administrative costs. However, SOLO 401ks are not expensive and work better for the self-emploed or single-owner highly compensated business owner. Relatively cheap like SEP’s but may be a better fit depending on your needs.It doesn’t cost anything to ask your advisor about if one of these vehicles would work for you so you can save money on taxes and save for your retirement for a happier 2011 tax time!Marion R. Syversen, MBA – PresidentNorumbegaFinancial207.862.2952Marion@NorumbegaFinancial.com Check out our website that includes weekly streaming videosWWW.NorumbegaFinancial.com Voted Bangor’s Best Financial Planning Firm 2008, 2009 & 2010 by Market Surveys of America In compliance with requirements from FINRA, all e-mail sent via the WSFG domain will be subject to review and archiving by Wall Street Financial Group, Inc. Email management, archiving & monitoring technology powered by Smarsh, Inc. Disclosure:Only securities and advisory services offered through Wall Street Financial Group, Inc. Registered Investment Advisor. Member FINRA/SIPC. Wall Street Financial Group, Inc. and Norumbega Financial are separate entities, independently owned and operated.


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