Retirement Planning
It is never too early to start planning for retirement. If you want
to live the same lifestyle--or an even better one--than you do now, you need
to start planning for retirement as early as possible. Rene S.
Randel, MBA, CPA, CFP® can analyze your projected income and
expenses and suggest investment funding techniques to help you make sure that your
golden years 10, 20, and even 50 years from now live up to your expectations. Rene
can even help you decide on the specific investments to make.
If you’ve changed jobs or are retiring, rolling over your
retirement assets has tax implications if not done correctly.
Rene educates and assists his clients in transferring assets easily
with the purpose of maintaining tax-deferred growth. Done correctly,
a rollover is a non-taxable event and gives you access to a wide range
of investments. Benefits Include:
- Your retirement savings continue to grow tax-deferred.
- You gain greater control over your retirement assets.
- You may enjoy a wider range of investment options.
- You can simplify your financial life by consolidating your retirement savings into a single IRA.
- You can have greater control control over withdrawals and distributions.
The most popular retirement plan in America, the 401(k) plan is
named after the IRS code section creating it. Like most things,
the 401(k) plans of today are vastly different from the 401(k) plans
of even just 10 years ago. Previously, 401(k) plans were only for the
very largest corporations as the plan administration costs were
prohibitive for smaller companies. Today, there are various types of
401(k) plans, including “safe harbor” plans which do not require annual
testing and the “solo” or “single” 401(k) plans designed for just a few
employees. These plans are inexpensive to administer and offer the same
tax benefits of the larger plans. Perhaps the biggest change is the
introduction in 2006 of the Roth 401(k). This feature allows participants
to invest their funds in tax-free “Roth” accounts. In fact, participants
can mix and match which portion of their retirement contribution goes into
a traditional tax-deferred account and which goes to the tax-free Roth account.
There are many important considerations when choosing a 401K plan.
Rene S. Randel, MBA, CPA, CFP®
educates his clients on all options and implications so they can make
fully informed decisions when it comes to their 401(k)s.
A SEP-IRA (Simplified Employer Pension) allows a company to defer
up to the lesser of 25% or $45,000 of an employee’s salary (deferral
amount is for 2007). As with all qualified accounts, the money is a
pre-tax contribution and the account grows tax-deferred until distributions are taken.
A drawback to SEP-IRAs is the requirement that the company must
contribute the same percentage of each employee’s salary (given that the
employees meet certain criteria relative to length of service and
hours worked). Therefore, a SEP is a good solution if you are self-
employed or if the business owner is comfortable making equal
contributions, on a percentage basis, for all of its employees.
To discuss the viability of a SEP-IRA Plan for your company or
if you’re considering moving your company’s existing plan, please
call us at 805.389.3330 or click here to schedule a consultation.
If your company employs fewer than 100 people and is considering adding
a qualified retirement plan (pre-tax contributions and tax-deferred growth),
a SIMPLE-IRA Plan (Savings Incentive Match Plan for Employees) is one of the
most hassle-free and inexpensive means of doing so. SIMPLE Plans are certainly
not a misnomer. From an administrative aspect, implementing a SIMPLE plan
couldn’t be easier. Advantages Include:
For Business Owners:
- No testing requirements.
- No annual tax filings.
- No administrative expenses
- Reduced administration burden compared to a 401(k).
- Limited fiduciary liability to plan participants.
For Employees:
- Employer contribution or match.
- Employee directly owns his or her own account (the account is not commingled like a 401k).
- Self-directed brokerage account with a large number of investment choices.
- No restrictions on percentage of income that can be deferred. (There is a limit on the total dollar amount that can be contributed. The limit for 2007 is $10,500 and $13,000 for age fifty and older.)
To discuss the viability of a SIMPLE-IRA Plan for your company or if
you’re considering moving your company’s existing plan, please call us at 805.389.3330 or click here to schedule a consultation.
An IRA is a personal savings plan that provides income tax
advantages to individuals saving money for retirement purposes.
The Individual Retirement Account brings together two powerful
forces, both of which benefit you: 1) tax-deferral, and 2) tax
savings. If you have money that you can afford to invest for the
long term, there's really no reason not to open an IRA. Any
individual can open and make contributions to a traditional or
Roth IRA, as long as you, or your spouse (if you file a joint return),
received taxable earned compensation during the year and you were not
70 ½ years old by the end of the year.
Please Call us at 805.389.3330 or click here to schedule a
consultation to find out more about the many different types of IRAs,
their various benefits and associated tax implications. Rene will help
you decide what's best for you based on your long-term financial goals.
Defined Benefit Plans provide small business owners with a means of
deferring more income than 401K, SIMPLE and SEP-IRA plans. These plans
are being implemented less frequently by big businesses, but they are
growing in popularity with certain types of small businesses, such as
law firms, medical practices and consulting firms. If you have a
limited number of employees and wish to defer amounts in excess of
$50,000, it may be a solution worth considering.
To discuss the viability of a Defined Benefit Plan for your company,
please call us at 805.389.3330 or click here to schedule a consultation.
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