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Retirement Planning

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Individual And Business Retirement Plans

A tax qualified retirement plan is a necessity for both individuals and businesses. Individuals who contribute to a 401(k), 403(b) or various IRA plans are more likely to have a comfortable asset base to rely on during retirement.

Businesses offering tax qualified plans can attract and retain key personnel at a minimum cost to the corporation. We serve both the individual and business marketplace providing retirement accounts, rollovers, and income planning.

Group Benefits And Qualified Retirement Plans

Group Retirement Plans & BenefitsMany small to medium businesses do not provide a group retirement plan to their employees. Business owners might worry about cost, implementation, management or participation from their employees.

Investment firms realized that this niche market was under-served and have created low cost group plans that require minimal maintenance by the business owner or operator.

When offered, employees have seized the opportunity to defer taxable income while saving for their retirement years. For-profit companies can easily implement affordable 401(k) plans while non-profit organizations can establish 403(b) plans for their employees.

Plan administrators provide diversified investment options including conservative fixed interest accounts as well as more aggressive accounts offering mutual funds from leading firms such as AIM, Federated, Fidelity, MFS, T.Rowe Price and Vanguard.

A company/group plan is maintained by the plan administrators so the business owner(s) and employees can maintain productivity. The administrators will provide information regarding contribution limits, changes in the tax code and withdrawal options each year. Congress also allows business owners to deduct a portion of the plan expense.

401(k), 403(b) Transfers And IRA Rollovers

If you are leaving your place of employment, often times you can only keep your retirement plan with the administrator for a short period of time. In many cases, you might simply wish to execute what is commonly referred to as an IRA rollover. A rollover will allow you to take advantage of recent beneficial IRA legislation.

The most prevalent mistake some retirees make is in thinking they need to cash out of their group plan when they separate from service. If you choose to cash out rather than rollover your plan to a new tax-qualified account, the principal in your plan can be taxed as ordinary income. To make matters worse, if you have not reached age 59 ½, a ten percent early withdrawal penalty can be enforced.

Fortunately, the Internal Revenue Service allows for the rollover of retirement accounts from one qualified plan to another without creating a taxable event or ten percent penalty. A qualified rollover allows taxable income to be deferred to at least age 59 ½ when you may begin taking withdraws free from IRS penalties.

If you have no need for a distribution, then your retirement dollars can continue to grow tax deferred until your mandatory required distribution at age 70 ½. The mandatory distribution is based on IRS life expectancy tables.

Individual IRA Contribution Limits

Individuals may need to create their own retirement plan if they are self-employed or if their employer does not offer a group plan. Currently, individuals have several options available to them. There are many companies offering IRA, Keogh, Roth, and Self Employed Pension plans (SEP’s). Conservative investors can establish fixed interest accounts while more aggressive consumers may choose to set up a self directed online brokerage accounts.

IRA contribution limits are $5,550 in 2016. Investors over age 50 are afforded a $1,000 catch-up provision in addition to the amount listed above. Entrepreneurs who have created corporations or other entities are allowed larger contributions based on declared income and IRS mandated limits. Contact us and we can you help set up a personal retirement account suitable to your risk tolerance.

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In summary, both businesses and individuals can easily establish and maintain a retirement account. Changes to the tax code and Congressional mandates make these plans more attractive than ever.

The future solvency of Social Security and current national debt only underscore the need for advanced planning. It is more important than ever to help yourself and your employees plan for a secure retirement.