401(k) Plans
A 401(k) plan is a popular retirement savings option where employees contribute a portion of their salary on a pre-tax basis. Employers often match contributions up to a certain percentage, which boosts employee savings. This plan offers a variety of investment options and is a key tool for attracting and retaining top talent.
Safe Harbor 401(k) Plans
A Safe Harbor 401(k) plan is similar to a traditional 401(k) but includes mandatory employer contributions that are immediately vested. This plan design helps employers bypass certain IRS non-discrimination tests, making it easier to offer a 401(k) plan without the administrative burden.
Simple IRA
A Simple IRA is designed for small businesses with fewer than 100 employees. It allows employees to make contributions to their retirement savings while requiring employers to match contributions or make non-elective contributions. This plan offers an easy and cost-effective way to provide retirement benefits.
SEP IRA (Simplified Employee Pension)
A SEP IRA is a retirement plan that allows employers to make contributions to individual retirement accounts (IRAs) set up for employees. It’s ideal for small businesses or self-employed individuals, as it has low administrative costs and offers flexibility in the amount of annual contributions.
Profit-Sharing Plans
Profit-sharing plans allow employers to make discretionary contributions to employee retirement accounts based on the company's profits. This type of plan provides flexibility in contributions and is a great way to align employee interests with company performance.
Defined Benefit Pension Plans
A defined benefit pension plan guarantees employees a specific retirement benefit amount based on a formula that includes salary history and length of employment. This traditional retirement plan provides a stable and predictable income for retirees, though it requires a significant commitment from employers in terms of funding and administration.
Cash Balance Plans
A cash balance plan is a type of defined benefit plan that acts like a 401(k), where employees have individual accounts credited with a percentage of their salary plus interest. It combines the security of a defined benefit plan with the flexibility and portability of a 401(k), making it attractive to businesses looking to offer competitive retirement benefits.
Deferred Compensation Plans
Deferred compensation plans allow employees to defer a portion of their income to be paid out at a later date, typically at retirement. These plans are often used by executives and key employees and can provide tax advantages by deferring income to a time when the employee may be in a lower tax bracket.
