Retirement Planning
Planning for retirement can be very intimidating, but with the right advice, the process can be less overwhelming. Let us help you develop a successful retirement investment strategy by:
Determining your financial goals for retirement - Assessing your current investment strategies to ensure they matched specified goals
- Investing money efficiently to help you reach these goals
With the availability of retirement products we are confident we can establish an investment strategy to match your retirement goals.
Roth IRAs
The Roth IRA is an alternative to the Traditional IRA. All contributions to the Roth IRA, and assets rolled from a Traditional IRA, are made with after-tax dollars. Therefore, benefits come from the potential for tax-free distributions of your accumulated earnings at retirement.Roth IRA Eligibility
If you have compensation* and your adjusted gross income (AGI) does not exceed certain limitations, you can open a Roth IRA, even if you are already a participant in an employer-sponsored plan. There is no 70½ age limit on making contributions.
*See IRS publication 590 for the definition of compensation.
Roth IRA Contribution Limits
- Eligibility gradually phases out when AGI is between $95,000 and $100,000 (single) and $150,000 and $160,000 (married).
- Effective January 1, 2002, Roth IRA contributions are limited to the lesser of the annual amount or 100% of your compensation.
The annual amount is increased as follows:
Year Amount
2002-2004 $3,000
2005-2007 $4,000
2008 $5,000
2009 and beyond Indexed in $500 increments
for COLA
Married couples, where a spouse is not employed, may contribute the lesser of the annual amount (listed above) x 2 or 100% of the combined income of you and your spouse, not to exceed the listed annual amounts.
Contributions to the Traditional IRA and the Roth IRA are limited to the combined annual total (listed above) in effect for the year.
Catch–up contributions for those 50 and older:
As of January 1, 2002, individuals who attain the age of 50 before the close of the taxable year may contribute an amount greater than the basic annual amount as follows:
Year Amount
2002-2005 $500
2006 and beyond $1,000
When your income exceeds the AGI maximums, you are no longer eligible for a Roth IRA contribution.
Conversion from a Traditional IRA
Existing account balances you have in a Traditional IRA may be converted or rolled over into a Roth IRA. This may allow you to take advantage of tax-free accumulation or earnings in future years. This is available to you if your household AGI is $100,000 or less. The amount converted will be subject to income taxes. Please seek advice from a certified tax advisor when considering whether or not this is a wise option for you. Neither PrimeVest, nor any of its representatives may give tax advice.
Roth IRA Distributions
You may take tax-free, penalty-free distributions from your Roth IRA if you satisfy two conditions. First, you must meet a five-year holding period which begins with the tax year for which you fund your Roth IRA contribution. Second, your distribution must be for one of the following reasons: attainment of age 59½; death or disability; or first time home purchase. If your distribution meets these two conditions, it is considered a qualified distribution and avoids all taxes and penalties. Distributions that are not qualified will be subject to tax and potential penalty.
Please remember to consult your tax advisor.
Traditional IRAs
One of the best ways to accumulate additional assets for retirement is through a Traditional IRA, Individual Retirement Account. With a Traditional IRA, you can take an active role in planning your financial independence.Save with Tax Deduction Tax-Deferral
The Traditional IRA is an excellent tax shelter for you as you build your retirement investments. Your Traditional IRA contributions may not be fully deductible if you are participating in an employer-sponsored retirement plan. However, even if you participate in such a plan, you may still deduct all or part of your contribution, depending on your adjusted gross income. An often overlooked benefit of a Traditional IRA is the tax deferral of the earnings. You pay no taxes on your Traditional IRA earnings until distribution. This lets you reap the full benefits of compounding. Even if your contribution turns out to be a nondeductible one, it makes sense to consider contributing simply for the tax-deferral feature.
Some Important Considerations
IRA Eligibility
If you have compensation* and are under 70 ½ for the entire tax year, you can open a Traditional IRA, even if you participate in an employer-sponsored plan. In the case of a married couple filing a joint Federal Income Tax return, if one spouse has compensation and the other has none, or elects to be treated as if he or she has no compensation, a spousal contribution can be made.
*See IRS publication 590 for the definition of compensation.
Traditional IRA Contribution Limits
Effective January 1, 2002, Traditional IRA contributions are limited to the lesser of the annual amount or 100% of your compensation.
The annual amount is increased as follows:
Year Amount
2002-2004 $3,000
2005-2007 $4,000
2008 and beyond $5,000, indexed in $500 increments for COLA increased beginning in 2009
The Spousal IRA contribution is the lesser of the annual amount (listed above) x 2
or 100% of the combined income of you and your spouse, not to exceed the listed
annual amounts. Two accounts are needed for spousal IRAs.
Catch-up Contributions for those 50 and older
Beginning on January 1, 2002, individuals who attain the age of 50 before the close
of the taxable year may contribute an amount greater than the basic annual amount as
follows:
Year Amount
2002-2005 $500
2006 and beyond $1,000
Simplified Employee Pension Plan (SEP)
Interested in receiving an immediate tax break while planning for the future? Small business owners need retirement plans for the same reasons many large corporations have them: Valuable Tax Advantages and to Attract and Retain Talented Employees.
The Simplified Employee Pension (SEP) is a low-cost retirement plan designed for small businesses, self-employed individuals, and professional partnerships. Since SEP contributions are discretionary and the percent of contribution may vary each year, it is an appropriate choice for business owners with unpredictable profits. A SEP plan is designed for employers looking to avoid high administrative costs and hassles, but seeking the tax breaks provided by a qualified retirement plan.
The SEP plan uses the SEP IRA to hold all employer contributions. The IRA may be the same IRA that also holds Traditional IRA contributions.
Advantages of the SEP Plan
- Flexibility of Employer Contribution
The SEP plan allows for flexible employer contributions of up to 25% of compensation. Each year the employer has the discretion to decide whether or not to make a contribution and may vary the contribution percent made on behalf of the employees. - Easy and Low Cost Administration
SEP plans eliminate the administrative complexity associated with larger retirement plans. - Relief from Fiduciary Responsibility
Investment decisions and performance are the responsibility of each employee as contributions are made to individual IRAs. - Tax Advantages
Employer contributions are 100% tax deductible. Participants pay no tax on contributions or investment earnings until withdrawal.
Savings Incentive Match Plan for Employees (SIMPLE)
If you are a small business owner, employing 100 or fewer individuals, you may want to consider the SIMPLE retirement plan for your employees. The Small Business Job Protection Act, passed in 1996, created a new retirement plan choice for the small business owner-the Savings Incentive Match Plan for Employees-SIMPLE. The SIMPLE plan is ideally suited as a start up retirement savings plan, for small employers who do not currently sponsor a retirement plan, or an employer interested in converting to a more cost effective plan.This plan encourages your employees to participate in savings for their own retirement, and also provides you with a new incentive to attract and retain qualified employees in a competitive environment.
The SIMPLE plan uses the IRA-a SIMPLE IRA-to hold all employee and employer contributions.
Advantages of the Simple IRA Plan
- Less Employer Liability/More Employee Flexibility
Investment decisions made by the employee regarding this IRA relieve the employer of fiduciary liability and allow the employee greater flexibility. - Affordable and Easy to Implement
SIMPLE plans eliminate many of the administrative costs, and tedious requirements and procedures often associated with larger retirement plans.
The SIMPLE IRA is not subject to complex reporting and testing requirements associated with a 401(k) retirement plan.
- No Percentage Limit on Contributions
Effective January 1, 2002, the limit on elective deferrals for eligible employees (which had been limited to $6,500) is increased as follows:
Year Amount
2002 $7,000
2003 $8,000
2004 $9,000
2005 and beyond $10,000, indexed in $500 increments for COLA increases beginning in 2006
- Catch-up Contributions for Those 50 and Older
Beginning on January 1, 2002, individuals who attain the age of 50 before the close of the taxable year may contribute an amount greater than the basic annual amount as follows:
Year Amount
2002 $500
2003 $1,000
2004 $1,500
2005 $2,000
2006 and beyond $2,500, indexed in $500 increments for COLA increases beginning in 2007
- Employer Contribution Options
Employees offer matching contributions equal to employee contributions (up to 3% of employee wages) or fixed contributions equal to 2% of employee wages. - Tax Advantages
The plan offers generous tax advantages to the employer and employees. Distributions are generally taxed under rules applicable to Traditional IRAs.
401(k) Plan
Companies come in a variety of sizes with their own individual needs. Shouldn’t 401(k) plans have the same flexibility? PrimeVest* Financial Services and your Investment Executive, can coordinate a 401(k) plan to suit the needs of any company, regardless of its size.Our Approach makes PrimeVest unique. Working with your Investment Executive, you will receive the guidance you need with retirement plan selection. By evaluating your company’s needs and objectives, PrimeVest can recommend an appropriate plan design, investment choice, and third party administration firm. We seek to create a custom fit.
PrimeVest* Financial Services has formed alliances with experienced 401(k) providers and holds them to strict service standards. Through these alliances, we seek to bundle the right 401(k) plan for your company-combining plan design documents, third party administration, investments, and communication/education.
Plan Design/Documents
- 401(k)/Profit Sharing
- Safe Harbor 401(k)
- Age Weighted Profit Sharing
- New Comparability Profit Sharing
- Determination Letter Filing
- Amendments
Third Party Administration
- Daily Valuation
- Record Keeping
- Compliance Testing
- Government Reporting
- Toll-free phone Access
- Internet Access
Investments
- Mutual Funds
- Multiple Mutual Fund Families
- Independent Money Managers
- Self-directed Brokerage Accounts
- Group Pension Annuities
Communication/Education
- Enrollment Materials/Videos
- Quarterly Statements/Newsletters
- Enrollment Meeting Assistance
- Individual Employee Consultation
- Employee Education
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PrimeVest® Financial Services, Inc. is an independent, registered broker/dealer. Member SIPC/FINRA. Securities and insurance products offered by PrimeVest. Investment Executives are registered to conduct securities business and licensed to conduct insurance business in limited states. Response to, or contact with residents of other states will only be made upon compliance with applicable licensing and registration requirements. The information in this website is for U.S. residents only and does not constitute an offer to sell, or a solicitation of an offer to purchase brokerage services to persons outside the United States. |
