Attract and retain top talent to your business, help current employees save for their future, and enjoy potential business tax savings. It’s all possible by offering a retirement plan as part of your employee benefits package. Learn more about the types of plans available and contribution requirements to determine the best option for your business.
401(k) Plan: A 401(k) plan encourages employees to save for retirement through pretax and Roth 401(k) contributions. Pretax contributions are deferred until your employees draw from their accounts. Roth 401(k) contributions are made post-tax, and can be withdrawn tax-free under certain conditions.
As the employer, you have the option to match part or all of the employee’s deferrals. If you prefer, you can offer a profit sharing contribution that is allocated to eligible participants regardless of whether they defer into the plan.
Your employees decide how much they want to contribute to the plan, and through payroll deductions, that percentage goes into the individual 401(k) accounts.
Contributions may come from:
SIMPLE 401(k): Saving Incentive Match Plan for Employees (SIMPLE) requires an employer to make one of the following contributions to the plan:
SIMPLE 401(k) provides small business owners with less than 100 employees a cost-effective way to offer retirement benefits to their employees. It is not subject to annual nondiscrimination testing and may allow for loans. Employers cannot maintain any other retirement plan for employees who are eligible to participate in the SIMPLE 401(k).
Money Purchase Plan: A fixed employer contribution is required, usually a percentage of compensation, to an employee’s individual account. An employer can have other retirement plans along with a money purchase plan, and the business can be any size. This plan does not have a cash deferral option.
Profit Sharing Plans: Contributions are made by the employer. The business owner has the flexibility to contribute and deduct between 0 and 25 percent of eligible participants’ compensation. A profit sharing plan does not require a net profit, but offers a way for employees to share an employer’s profit. A major benefit is the possible tax-deferred growth potential, since any investment earnings are tax-deferred until withdrawn.
SIMPLE IRAs: Employees and employers make contributions to Individual Retirement Arrangements (IRAs) set up for employees. A SIMPLE IRA is for employers who do not sponsor another type of plan and have fewer than 100 employees. Under this plan, the employer provides either a 2 percent profit sharing or a 3 percent match to an individual account set up for each eligible employee. Employees defer a part of their salaries into the plan for retirement. Each employee is always 100 percent vested in his or her SIMPLE IRA.
Employee benefits typically refers to retirement plans (pensions, 401k, 403b), medical & dental insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. for your business.
GCFG Insurance works with top-rated Employee Benefits companies to provide your business with a high quality, yet affordable plan that suits your desires and budget constraints.
To establish an employee benefits plan for your business, or receive a complimentary, no obligation consultation, please contact:
The Insurance Division of Gold Coast Financial Group
Julie B. Mains
CA Insurance licensed #0G51624
2753 Camino Capistrano | Bldg. B, 1st Floor | San Clemente, CA 92672
For ownership agreements, employment contracts, business responsibilities, and more, please contact Mains Law Office for the legal necessities for your small business. www.mainslawoffice.com
To insure your small business, offer your employees insurance-based employee benefits, fund your buy-sell agreement, and more, for information, please contact:
Julie B. Mains, ESQ.
Mains Law Office
30452 La Plaza, Suite 206
Dana Point, CA 92629