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Plan
Types
Designing
the appropriate type of retirement plan takes many factors
into consideration, including:
- The
business owner's goals for the plan..
- The
size of the business.
- The
age of the owners and key employees.
- The
number of employees.
- The
amount of money owners can contribute on an annual basis
- Whom
the business wants to benefit with the plan, and other numerous
factors.
For
example, if your company has mostly young people, including
the owner(s), you may want to consider a 401(k) plan that
allows employees to contribute pre-tax money to the plan.
The company can provide what is known as a "match" each year
if desired.
Or,
if your firm has consistently stable profits-plenty of money
to provide contributions each year, and your owners are getting
on in years, you may want to consider a defined benefit plan.
Employees cannot make pre-tax contributions, but the older
employees can benefit greatly since the formula weighs heavily
on the years left until retirement.
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