As a business owner, there are several reasons you might want to implement a qualified retirement plan for you and your employees. Not the least of which is that qualified plans provide numerous tax advantages. Contributions for all participants are 100% tax-deductible to the business up to certain limits. Annual contributions by the business are not considered taxable income to …
Minimum Retirement Plan Distributions
Most qualified retirement plans offer significant tax benefits for those willing to follow a few IRS specified rules. The government wants to make these plans (401(k)s, Keoghs, SEPs and traditional IRAs) available for specific needs, and has established tax law to help eliminate potential abuses of these tax advantaged investment alternatives. Retirement Plans are Intended for Retirement For one thing, …
Living Expenses In Retirement
In order to plan realistically for the future you need to have a clear understanding of what money you need when you retire. This will include the cost of living and special activities you will have. It is estimated that you will need to replace 60% to 80% of your pre-retirement earnings in order to keep the standard of living …
Deferred Compensation
In addition to providing qualified plans to employees, many business owners implement nonqualified alternatives in order to supplement retirement benefits. These selective benefit plans are generally offered to key employees and owners. One popular nonqualified benefit is deferred compensation. Basically, nonqualified deferred compensation refers to an arrangement between an employer and an employee in which compensation for current services is …
Calculating Social Security
Social Security was originally introduced in 1935 in the aftermath of the Great Depression. It was intended to provide a safety net of income to retired and disabled workers and their families. Social Security is a mandatory plan, requiring most wage earners to contribute a percentage of their yearly income to support the program. In return, they, their spouses and …
Bridging The Gap
In years past, it was often realistic for retirees to base the majority of their retirement income on Social Security benefits and traditional employer sponsored pension benefits. Unfortunately, Social Security retirement benefits have gradually been reduced in real terms, and the age one needs to attain in order to qualify for retirement benefits has been increasing steadily. iven current retirement …
The Basics Of Retirement Planning
When planning your retirement, it is important to remember that money, more than any other factor, will dictate most of your retirement decisions. Your level of financial preparedness for your retirement years will determine when you retire, what type of lifestyle you and your family will enjoy during retirement, and what might be left as a legacy to your heirs. …
Where Bonds Belong
Bonds are essentially loans to a corporation or the government. Bonds are often referred to as income investments because, in return for the use of your money, the bond’s issuer agrees to pay a certain rate of interest at regular intervals for a set period until the bond matures or the principal is otherwise repaid. Bonds can be for varying …
What Is A Qualified Annuity?
Many employers allow their employees to contribute to an annuity program. This becomes an investment option in a salary reduction retirement plan. Under this plan your current taxable salary is reduced and in addition it accumulates tax-deferred earnings. Some companies have added annuities to their retirement list. If you work for a non-profit organization you’ll probably be able to choose …
The Importance Of Asset Allocation
Diversifying among different types of investments is important. It can also play a large role in the return you can expect. In fact, how you allocate your investments among asset classes (stocks, bonds, mutual funds, etc.) may be the most important factor, by a significant margin, in determining portfolio performance. That means making asset allocation choices should be one of …