Retirement Plans

SEP IRAs

A Simplified Employee Pension IRA (SEP IRA) plan is a type of workplace retirement plan that allows an employer to contribute tax-deductible dollars to the owners and the employees retirement account. SEP IRA plans are funded solely by employer contributions (employee deferrals are not permitted); each eligible employee generally receives the same percentage of their individual compensation amount, and that percentage is at the discretion of the employer from year to year.

An employer can set up a SEP IRA with the following maximum eligibility requirements (but can choose to be more lenient):

Age 21 or older
Worked for the employer during three of the last five preceding years, and
Expected to earn at least $600 in the current year from the employer sponsoring the SEP

This plan is flexible and works for any size and type of business.

Owner-only 401(k) plan

You may be a one-person business, but that doesn't mean you can't save for retirement like others at large companies. The owner-only 401(k) plan is designed for business owners – with no employees other than their spouses – who want to increase or maximize pre-tax and post-tax retirement contributions with flexibility. Self-employed individuals, corporations and partnerships can set up this plan.

Contribution features

Each year, you can generally contribute elective deferrals up to 100% of compensation or a maximum of $19,500. If you're 50 years of age or older, you can contribute $26,000* and receive employer non-elective contributions up to 25% of total compensation as defined by the plan. Total contributions to a participant's account (not including catch-up contributions) cannot exceed $58,000*.
Instead of a pretax contribution, you may contribute all or part of your salary deferral amount as an after-tax Roth contribution (up to $19,500). Contributions (except Roth contributions) are tax-deductible, and earnings can grow tax-deferred.

This plan is only available to business owners who have no employees other than their spouse.

*These limits are subject to change each year per IRS guidelines

Plans For Your Employees

You can help your employees save for retirement with tax-deductible and after-tax contributions. Pathway Wealth Management can help you determine what plan is the right plan for your business.

Here are some of the retirement plan options we offer for business owners with employees:

401(k) Plans:

This type of plan can be complex, but very flexible. It works best with a third-party administrator for plan compliance, document maintenance, required compliance testing and IRS Form 5500 filing.

Participants can make salary deferral contribution up to the IRS maximums on a pre-tax or post-tax basis.
As the employer, you choose whether to contribute, as well as how to and how much to contribute within certain IRS limits.
Employer contributions will lower corporate taxes and increase future savings.

Simple IRAs:

A Simple IRA allows you and your employees to contribute to the plan through salary deductions. You're also responsible for making contributions to the plan. Consider this plan if:

You're looking for a primarily employee-funded plan with low required employer contributions.
You can not maintain another retirement plan during any part of the calendar year.

Safe Harbor 401(k):

With a Safe Harbor 401(k), you, as the business owner, must be willing to make required contributions in the form of a match or non-elective contribution. Any size business may find these plans attractive, but take a closer look if:

You have fewer than 100 employees.
You want to contribute or defer your salary up to the IRS maximum.
You are open to making annual employer contribution while saving taxes.

Our first priority is helping you take care of yourself and your family. We want to learn more about your personal situation, identify your dreams and goals, and understand your tolerance for risk. Long-term relationships that encourage open and honest communication have been the cornerstone of my foundation of success.

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