Simply Junior

This is a company that works from every end of financial planning in providing retirement plan services. The Retirement Plan Company works with financial consultants, companies, sponsor and others to development company retirement plans. Retirement is an important matter to be considered by each and every individual and The Retirement Plan Company helps people give it the consideration it deserves.

Where Did it Start?

The Retirement Plan Company was established in 1992 with the objective of providing services to companies developing a retirement plan. The company gives professional guidance and instruction through the use of modern programs and technology to help companies create retirement plans for their employees. The company gives ongoing support to their clients, giving them the benefit of their expertise in financial and retirement planning.

While using cutting edge technology and Internet convenience, the Retirement Plan Company has not lost sight of the value of a personal touch. They keep person to person contact via online chat services so they can give their clients the personal attention they need.

Help from the Professionals

Expert advisors are on hand to give the benefit of their financial education and background to help companies develop their retirement plans. These experts keep their finger on the pulse of the changing financial world and are therefore able to give timely direction on a variety of financial matters.

Their mutual funds include nearly 1,000 diverse funds and they adapt their plans to meet the needs of a variety of investors and their circumstances. They have coupled with individual TPAs to offer more diversity than many other companies in their field.

Retirement is the time of life to enjoy the fruits of your hard labor over many years. During your retirement you should not have to be overly preoccupied with financial matters. In order to have that type of worry free retirement a good plan now is imperative. Concentrating now on a good retirement plan will make for the enjoyment of the kind of retirement you deserve. That is why retirement planning is an important part of everyone’s financial plan.

Don’t leave such an important time of life to chance. There is much that can be done right now to ensure that you are able to enjoy the lifestyle you always dreamed of during your retirement years. To make sure that happens, take advantage of the professional guidance and help available today. By doing this you are sure to have an enjoyment retirement in the future.

Qualified retirement plan

This form of retirement plan is one that is certified by the ” Internal Revenue Code Section 401(a)” and the “Employee Retirement Income Security Act of 1974 (ERISA)” therefore it has more advantages regarding tax treatment, allowing employers to subtract yearly permissible contributions for every participating employee and the earnings on these contributions are “tax-deferred” until taken out for every participant; and some taxes may be deferred further by means of transferring into another different kind of IRA.

Let’s look at what this can do for employers.

First of all it can Draw experienced employees into their company. It can also motivate and retain good employees. It encourages employees to set aside financial aid for future use or for retirement because the benefits of the Social Security alone are not enough to support a sensible way of living for retirees, and it can Protect plan assets from creditors.

Two main categories of “Qualified retirement plans”

1. “Defined benefit plans” are company retirement plans, like pension plans, where when an employee, on reaching retirement, will receive a specified amount that is usually based on his salary and number of years in the service, whereby the employer carries the full risk in investment. Both employer and employee, or just the employee alone, can contribute.

2. “Defined contribution plan”. This type of plan outlines the amount that flows to employees and how much should be contributed by an employer each year to the retirement plan. It also keeps account balances of all members, and states that no member should receive an allotment greater than 25% of compensation or 30,000 dollars, (whichever is the lesser of the two) throughout any year.

“Non-qualified retirement plan”

These type of retirement plans do not meet requirements set by “Internal Revenue Code Section 401(a)” and the “Employee Retirement Income Security Act of 1974 (ERISA)”. They are financed by employers therefore are flexible compared to “qualified retirement plans” but do not have the tax benefits that “qualified retirement plans” offer. Benefits, structured in annuities form, are paid generally at retirement age and are liable to “tax” just like “ordinary income tax”; or in “lump sum” or in a payment that may be transferred or converted into IRA, to suspend or defer taxes.

“Top-Hat plans” (THP), “Excess benefit plans” (EBP) and “Supplemental executive retirement plans” (SERP) are types of non-qualified and deferred compensation plans patterned to complement or enhance “qualified retirement plans”.

“Non-qualified retirement plan” supplement “qualified retirement plans” by compensating the benefits that are unavailable to qualified plans and typically covers higher paid company employees. It may be non-funded or funded. The huge disadvantage with this plan is that there is no security promised to the employees in the event that the company should go into bankruptcy, or is sold to another company.

You must always know your options and should develop a plan way before your retirement. Pursuing professional investment advice will help you manage and synchronize your options with a complete and secure financial plan.

There are different types of retirement plans – government-sponsored plans, personal plans, annuities and employer-sponsored plans.

What’s the point of knowing all these plans?

This is because your employer’s retirement savings plan is important for your future financial security. You should understand how your plan works and what benefits you’ll receive. And it’s in your best interest to keep track of your retirement benefits too.

Let’s look at these different types of retirement plans.

Government-Sponsored Plans

Social Security plan is the best example in this category.

Personal Plans

Individual Retirement Agreement or IRA is the most well-known example. They can come in different types according to their tax treatments.

Annuities

These are contracts established with an insurance company. They can be fixed and variable annuities .

Employer-Sponsored Plans

2 types – qualified and non-qualified retirement plans.

Qualified Retirement Plans

These plans meet the Internal Revenue Code (IRC) requirements and the Employee Retirement Income Security Act of 1974 (ERISA) requirements.

They offer several tax benefits such as allowing employers to deduct annual allowable contributions for each participant of the plan; contributions and earnings on those contributions are tax-deferred until each participant withdraw them and each participant can even further defer some of the taxes through a transfer into a different type of IRA.

You can go for these qualified plans:

(A) Defined Benefit (DB) Plans

These are company retirement plans like pension plans, in which a retired employee receives a specific amount based on salary history and years of service, and in which the employer bears the investment risk.

The employee, the employer, or both may contribute to the plan.

Examples of DB plans:

1. Pensions

They’re a type of retirement plan that guarantees a specific amount to be paid out to the employee when he/she retires. The amount is calculated based on an employee’s salary, years of service and a fixed percentage rate.

The Pension Benefit Guarantee Corporation (PBGC), a federal agency, covers employer-sponsored pension plans.

Eligibility for the plan depends on a company’s policy. Some companies require their employees to serve for a certain period of time before they can become eligible for a pension plan. If an employee leaves the job, the pension plan stays with the previous employer.

2. Annuities

They’re retirement plans that have fixed monthly payments at the age of retirement. You can’t transfer the annuities into an IRA account, hence the amount is taxed as regular income the year you receive it.

(B) Defined Contribution (DC) Plans

These plans allow the employer and/or employee to make contributions, so that the final benefits depend on how much is in the account and the rate earned by the account’s investments. Each participant needs to set up his/her own individual account in the plan.

The government doesn’t guarantee a participant’s pension benefits. Instead, the plan allows employees to decide on the investment, based on the employer’s options.

Some examples of DC plans:

1. Profit Sharing Plan

It allows an employer each year to determine how much to contribute to the plan (out of profits or otherwise) in cash or employer stock. The plan contains a formula for allocating the annual contribution among the participants.

2. 401k Plan

An employee can make contributions from his/her paycheck before taxes are taken out. The contributions go into a 401k account, with the employee often choosing the investments based on options provided under the plan.

In some plans, the employer also makes contributions, matching the employee’s contributions up to a certain percentage.

3. Employee Stock Ownership Plan (ESOP)

The employer contributes shares of the company’s stock to employees in return for special tax benefits.

4.Stock bonus plan

It’s a type of profit sharing plan, where contributions are made in the form of company stock.

Non-qualified Retirement Plans

These plans don’t meet the IRC or ERISA requirements. Employers fund these plans. They’re more flexible but don’t have the tax benefits qualified plans have. Upon your retirement, your employer pay you the benefits (in the form of annuities) which are taxed as ordinary income tax, or in lump sum payments, which you can transfer into an IRA to defer taxes.

An example is the 457 plan.

This plan aims at state and local government employees of tax-exempt organizations. Your contributions and earnings are tax-deferred until you withdraw them.

Distributions start upon your retirement but you can also take distributions if you change jobs or if you’ve an emergency.You can choose to take distributions in one lump sum, in annual installments or as an annuity. Distributions are subject to ordinary income taxes and you can’t transfer the amounts into an IRA.