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What plan options are available for a small business

What plan options are available for a small business

There are two kinds of retirement plans to choose from – qualified and nonqualified. Both plans allow tax-deferred growth on investment earnings. However, the main difference between the two is whether or not the contributions are tax deductible to you when they’re made.

Qualified Retirement Plans:
  • Meet IRS requirements--eligible for favorable tax considerations
  • May allow contributions from the employer as well as from employees
  • Allow contributions, made by the employer on behalf of eligible employees, to be tax deductible to the business
  • Include defined contribution plans, defined benefit plans, SIMPLE and SEP IRAs
Non - Qualified Retirement Plans:
  • Don’t meet the IRS or ERISA requirements for favorable tax treatment
  • Offer more flexibility in funding, vesting, distribution and reporting options
  • Are useful in adding to the retirement portfolios of highly compensated employees
When thinking about retirement planning benefits, it can be a challenge to select the type of plan that fits well with the specific needs of a business or organization. There are many different options, and each comes with its own unique features and limitations. Learn more about retirement plans by calling 1-855-826-5470.