Retirement Plans
As a Financial Specialist with more than 15 years of experience, I know many local families. My knowledge and understanding of the people in this community help me provide customers with an outstanding level of service. I look forward to helping families like yours protect the things that are important –I can also help you prepare a strategy to achieve your financial goals.
E-Mail: tercero@allstate.com
Miami Florida
Tel: 786-246-4411
Financial Representative
Individual life insurance
Business life insurance
Employee Benefits
Retirement plans
Daniel B. Tercero
WHAT’S THE BEST WAY TO COMPENSATE YOUR EMPLOYEES?
Salary and commission are only one component of compensation. Pensions and other retirement plans have long been a part of compensation packages. Thanks to a wide variety of retirement plans and compensation options, it’s easier than ever to offer employees retirement savings solutions.
Tax deductions for the business owner and tax-deferred savings for employees make today’s retirement plans affordable, manageable and flexible.
Would you like that plan
qualified or non-qualified?
There are two types of retirement plans from which to choose, qualified and non-qualified. Both usually delay payments to employees, allowing them to defer tax.The difference is in how you, the employer, are taxed.
A qualified plan allows you to currently deduct contributions to the plan, even though the funds are not taxable to the employee until a future date.
Most non-qualified plans don’t allow you to currently deduct contributions to the plan. Your business may receive a deduction when the employee receives the benefits, usually at retirement.
Qualified plans must benefit employees on a
non-discriminatory basis. Not so with a non-qualified plan. This often makes a non-qualified plan an ideal choice for businesses that can’t afford equal benefits for everyone. As an owner, you can choose to benefit yourself and any key employees you select. Or, if your business has maxed out its qualified plan, a non-qualified plan is a great way to provide additionalbenefits to key employees.
QUALIFIED PLANS
Defined benefit plans
(usually referred to as pension plans),
provide employees with monthly payments at retirement
based on such factors as age, years of service, and compensation.
The employer is responsible for funding the plan and
assuming the investment risk.
Defined benefit plans
Defined contribution plans, by contrast,
can be funded by both the employer and the employee.
The retirement benefits are not guaranteed and the employees have
responsibility for managing the investment choices within their accounts.
Over the last several years, defined contribution
plans have become increasingly popular
with employers due to the plans’
flexibility and lower costs.
Defined contribution and other
retirement plans
Offer one of the best ways to shelter
personal and business income from taxes
Allow employees to defer taxes on
investment earnings until the money
is withdrawn at retirement (possibly at
a lower tax rate), which can accelerate
the growth of the savings
Provide the caliber of benefit necessary
to attract, hire and keep quality
employees
There are two types of qualified plans:
defined benefit plans and
defined contribution plans.
The most common defined contribution plans are 401(k) plans, but they’re not the only option and they may not be the best choice for every business. Other retirement plans, such as
Savings Incentive Match
Plan for Employees (SIMPLE) IRA and
Simplified Employee Pension (SEP) plans,
offer different features that may be more
beneficial to a particular business. While
each plan has its own unique features,
they all:
-
No matter what type of business you have,
you will find several retirement plan options
that can offer a variety of benefits for both
you and your employees.
-
As an employer, your company’s
contributions to a defined contribution
plan are a tax-deductible expense.
Your company’s taxable income will
immediately decrease.
Tax relief
Employees will appreciate your support
in helping them to save for retirement.
Offering a defined contribution plan is
a simple, inexpensive way to expand
your benefits package and increase
employee satisfaction.
Employee satisfaction
Today’s qualified retirement plans offer
businesses the flexibility to meet their
plan objectives, such as:
Flexibility and control
Funding requirements
Contribution amounts
Eligibility
Vesting
Administration
Cost
Please note that agents and representatives cannot give legal or tax advice.
The brief discussion of taxes on this website may
not be complete or current. The laws and regulations are complex and subject to change.
For complete details, consult your attorney or tax
advisor.
NON-QUALIFIED PLANS.
When qualified plans do not provide enough retirement benefits
to key employees—including the owner— a non-qualified plan
can fill the gap.
In most cases, your company will receive no current tax deduction.
Under a non-qualified plan, you don’t have to meet
the nondiscrimination requirements imposed on
qualified plans.
This means you have the flexibility to offer a non-qualified plan
to just the key employees you wish to reward.
You can tailor individual plans to meet the needs of
your key people and your own specific goals.
For example, to encourage key employees to stay
with your company longer, you can impose longer vesting
periods than allowed under qualified plans.
Advantages for employees include
Deferral of income taxes
No statutory contribution limits
Survivor benefits for family
Enhanced retirement income
This information is provided for general consumer educational purposes and is not
intended to provide legal, tax, or investment advice.
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