Why use a qualified plan to save for retirement?
Simple. Tax Advantages. Different plans maximize value for different client personas.
Small, high revenue, professional firms
Credentialed professionals like doctors, architects, engineers, dentists, etc. with a small staff will
typically benefit most from a defined benefit plan. If there are employees, a floor-offset arrangement is the single most efficient way to deliver the highest potential for savings with the minimum staff benefit costs.
Savings potential: $200k – $400k annually. Maximum $2.8M in 10 years
Professional firms with young owners and tradesmen are examples of clients that would enjoy the tax-advantages of
a profit sharing plan. This plan has lower annual administrative costs, and lower staff benefit costs while still providing meaningful retirement savings for the owner.
Savings potential: $60k annually. No lifetime maximum
Other arrangements that exceed an ordinary IRA
Clients that want to make retirement plan contributions in excess of the low annual IRA limits but are not committed to an aggressive strategy can still set up a simple qualified plan. An SEP, SIMPLE IRA, or 401k plan is also available for the more passive saver. Staff costs vary by plan.
Savings potential: 25% of income annually.
No lifetime maximum
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Cornerstone Retirement Plan Advisors
Agawam MA | 413-262-9731