Business Solutions:

Group Benefits

Retirement Plans

Executive Benefits

Succession Planning

Retirement Plans:

Saving is among the most critical components of retirement planning.  Since there has been a shift toward the individual in terms of responsibility for retirement income, saving is more crucial than ever.  Group retirement plans allow for someone to save a considerably larger amount than they can individually tax defer, while receiving a tax deduction and in many cases an employer match.

What are retirement plans?
Technically speaking, retirement plans are either defined benefit or defined contribution plans.  Defined contribution simply means that you can put away up to a certain amount, at your discretion. A defined benefit that your employer will automatically contribute for you based upon various criteria. 

Defined contribution plans have many names: 401k’s, 403b’s, 457 plans, SEP & SIMPLE IRA’s.  Defined benefit plans are less common among companies, but those working for some larger companies and state and federal government will often have them as an option. 

Often times both types of plans will use vesting schedules, which may prohibit you from walking away with the employer’s contribution in a given timeframe. The contributions made by the employee are in most cases tax deductible as are the employer contributions deductible to the business. 

These tax features are designed so that employers offer these plans and that the employees participate. Retirement plans have considerably dropped in cost making them a great employee retention tool. An example would be a Safe Harbor 401k where the employer contributions are tax deductible and employee contributions are excluded from income for Federal Income Tax purposes.

Who will benefit from a retirement plan?
Social Security provides a smaller percentage of a retiree’s financial needs today than it did in the past, and people are living longer and spending more time in retirement. Developing a retirement investment strategy early may bring prospective rewards later on.

One compromise you should not make is with your retirement savings. The proper balance between committing to your future now by compromising on some of today’s conveniences may help you reach your retirement goals.