Synergy Asset Management

Retirement Planning

401(k) Plan Alternatives for Small Companies

For many companies, 401(k) plans are a good choice, providing the right amount of options and opportunities for a company and its employees. There are alternatives, however. In this post, we’ll share the options available to small companies.

Payroll Deduction IRA Plan: Employees establish either a traditional or Roth IRA with the financial institution of their choice, and then authorize a specific payroll deduction to fund their account.

Simplified Employee Pension (SEP) Plan: Employers contribute a set monthly amount to their employees’ traditional IRA accounts.

SIMPLE IRA Plan: SIMPLE is an acronym for Savings Incentive Match Plan for Employees. This plan allows both employees and employers to contribute funds to their employees’ traditional IRA accounts.

SIMPLE 401(k) Plan: Similar to the SIMPLE IRA plan, the SIMPLE 401(k) plan allows an employee to defer some compensation, however the employer must also make a matching and legally prescribed contribution.

Keogh Plan: A Keogh plan is a qualified tax-deferred pension plan specifically for a self-employed person or a partnership.

Because of the complexities and ramifications involved in selecting and implementing a retirement plan, we recommend that you work with an experienced financial planner or wealth manager like Synergetic Finance. Please contact us with your questions or to set up a complimentary consultation to discuss your company’s retirement planning needs and goals.

Coming soon: Author Joseph M. Maas of Synergetic Finance will be releasing his next book in the Insight series: 401(k) Insight: Getting to Retired!


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