American Financial Alliance, Inc.

CONNECT

Address:

210 Park Avenue Ste 101
Florham Park, NJ 07932

Phone:

(973) 287-3557

Fax/Other:

(201) 984-5433

Retirement Planning for Businesses

Defined Contribution Plans | Defined Benefit Plans
A retirement plan benefits you now as well as later. Are you looking ahead to retirement?
Setting up a retirement plan today can provide immediate benefits in the form of tax savings, as well as protect your future financial stability.


For the Employer
Contributions to the plan are tax deductible.

For the Participant
Contributions are not currently income taxable.
The plan's earnings accumulate free of current income taxation until withdrawn.
No income tax on net insured death benefits.
A Quality Retirement Plan is a Business Asset

In addition to tax advantages, a retirement plan provides incentives that money can't buy:
- Enhances employee loyalty
- Helps attract and retain quality employees
- Motivates employees with visible rewards for service
- Inspires employees to career-long dedication to your company
- Provides retirement security for employees...and for you
- Reduces your company's current tax obligation
Designing the Best Plan for Your Company

Of the many different retirement plans and options available today, how do you determine which one is best for your situation?
Start by considering:
- Who you want to benefit
- How much you want them to receive
- How much you want to spend
Your answers will help define the kind of plan that will best satisfy your needs.
Types of Plans

 
Defined Contribution Plans

Traditional Profit Sharing
Traditional plans divide the employer's annual contribution among participants as a uniform percentage of pay.

401(k)

Profit Sharing Advantage
An "age-neutral" plan that allows businesses to favor certain groups of employees with higher allocations. The allocation does not depend on the ages of the participants and can be used to favor business owners who are younger than their employees.

Age-Weighted
Age weighted profit sharing plans are designed to give the greatest benefit to those employees who are closer to retirement and have less time to accumulate retirement funds. Frequently this includes the business owner and key employees.

Select
Profit Sharing Select offers flexible annual contributions and flexibility in the way the contributions are allocated. Subject to certain IRS tests, Profit Sharing Select allows the employer to allocate a greater portion of the annual contribution to those select groups of employees who the employer most wishes to benefit.

Traditional Money Purchase
Money Purchase plans are appropriate for stable, established businesses that prefer a fixed contribution formula. This type of plan allows a business to maximize its deductions to a greater extent than would be allowed under a profit sharing plan. Money Purchase plans also permit equal treatment of employees who share the same compensation level.

Target Benefit
Target benefit plans are suited to stable businesses that can commit to a fixed contribution formula. These plans favor older employees, taking age, salary and length of service into consideration.
 
Defined Benefit Plans


Traditional
This plan specifies, or defines, the amount of retirement benefit that each participant will receive. Employer costs can vary over time and are recalculated each year.

412(i) Defined Benefit Plan
The 412(i) defined benefit plan is suited to the established business that wishes to maximize contributions and tax deductions to a greater extent than is permitted by a traditional defined benefit plan.

 

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Check the background of this financial professional on FINRA's BrokerCheck