Financial Advisory and Benefit Plans Solutions for Small Businesses
FIOH understands the challenges small businesses face every day. Through a team approach with CPA’s, professional alliances and local banks, FIOH provides benefit program consultation and asset management for small business. We focus on professional companies with less than twenty employees.
There are a number of retirement plans for small businesses that provides an up-front tax break and the ongoing benefit of tax-deferred compounding for employees to save for retirement:
SIMPLE IRA is easy to set up. If you have employees and want to let them make their own contributions, this may be a good choice. As an employer, note that you’re required to make a small matching contribution of 1% to 3% of each employee’s compensation. Similar to all other retirement plan, there is maximum contribution amount. For 2011, the maximum is 100% of their income up to a limit of $11,500. Participants who are 50 or older can make an additional $2,500 “catch-up”.
SEP-IRA or QRP (Keogh) - Simplified Employee Pension, and a QRP is a qualified retirement plan for the self-employed, sometimes referred to as a Keogh plan. With a SEP-IRA or QRP, the employer makes the contributions (employees can’t contribute). The tax-deductible contribution limits are potentially much higher than a SIMPLE IRA: 25% of employee compensation up to a $49,000 limit for 2011.
Individual 401(k) - An Individual 401(k) offers benefits similar to a traditional 401(k). This is intended for single owner (with spouse owner) or partnership companies with no full time employees. These plans allow for contributions up to 25% of compensation (20% of net self-employment income for the owner) and an additional $16,500 salary deferral (2011 limit), to the maximum limit of $49,000 (maximum of $54,500, including the 2011 catch-up contribution of $5,500 for those 50 or older).
Defined Benefit Plans – These plans offer substantial tax deductible retirement contributions. It can offer significant future retirement income to self-employed and small business owners. It allows for much larger contributions compared to the other plans described above. It is more complicated and expensive to administrate. Therefore, the FIOH’s team approach is valuable and effective.
FIOH helps our small business clients focus on their core business. We, as a part of the financial advisory team, work hand-in-hand with the team to make sure our client’s business owners meet their objectives and fiduciary responsibilities with their retirement benefit programs.
