Retirement Plans

Target Benefit Plans

What is a Target Benefit Plan?

A target benefit plan is a special type of money purchase pension plan which provides unguaranteed retirement benefits to employees due to the fact that retirement benefits are directly correlated to investment gains or losses. 

Defined Benefit Plan

What is a Defined Benefit Plan?

A defined benefit plan provides an employee with a set amount of money in the form of an annuity once retirement kicks in.  The amount of compenstation is typically based on a few factors such as duration of employment with the company and salary history as of retirement.  Employees who opt for early retirement will receive a lo

Money Purchase Pension Plan

Money Purchase Pension Plans

A money purchase pension plan is very similar to a profit-sharing plan; however, the key difference revolves around the flexibility of payment from the employer.  As opposed to the profit sharing plan, money purchase pension plans are mandatory; meaning that the employer is gua

Roth 401k

Roth 401k Overview

A Roth 401k is a special form of a traditional 401(k); however, there is one key difference in the tax treatment applied to both. A traditional 401k allows for the contribution of pre tax dollars into a retirement account while the Roth 401k allows employees to contribute after tax dollars to this account.

401k Planning - Retirement Savings Vehicle

401k Planning Definition

The most common and popular type of defined contribution retirement savings account is the 401k, or 401(k). The 401k provision in the tax code allows workers to avoid paying income taxes on the portion of their income which is elected to be moved directly into a 401k account.

Profit Sharing Plans

Profit Sharing Overview

Profit sharing plans are put in place to give employees a sense of ownership, or vested interest, in the company by allowing them to share in the profits of the company and also to help them increase their retirement funds. Even if a corporation decides to take part in a profit sharing, it is not mandatory that they contribute to the plan; it is at the sole discretion of the company. Secondly, conventional thinking would have us believe that profit sharing plans are only paid out when a company makes a profit. This is also not always the case, a company may elect to contribute to the plan even in a loss scenario.

Qualified Plans

What is a Qualified Plan?

The definition of a qualified plan is one that meets the IRS regulations outlined in section 401 of the tax code.  Qualified plans allow employers to create savings vehicles for their employees which carry special tax rules; one of which allows the employer contribution into the employee account as a tax deductible event.  Employees,

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