Why Consider a Defined Contribution Plan Solution?
• No risk Pension Feasibility Study (generally no cost, some large groups may be charged a retainer that is later credited toward plan installation costs) • More flexible than a SIMPLE or a SEP plan • Annual tax savings may exceed $19,000 (Depending on tax status and contribution amount) • Tax deferral on contributions and earnings • Payroll tax considerations: deferrals are subject to payroll tax, profit sharing allocations are payroll tax free • Opportunity to purchase life insurance with pretax dollars within IRS death benefit limits. Insurance purchases may be made without additional employee coverage requirement unlike in defined benefit plans • Investments grow tax-deferred, building wealth faster • Tax-free rollover to an IRA at retirement or at plan termination • Competitive annual plan administration fees • ERISA protection of assets from judgement creditors (in most cases) • Ideal for younger business owners Profit Sharing Plans Profit Sharing Plans offer both design flexibil
