Children of Soldiers Fund

The question of IRA vs 401k leaps to mind when setting up a small business retirement plan. Do you know the differences between plans? What does the Internal Revenue Code allow and restrict? Why should you even care? Because if you sell fixed indexed annuities and want to capitalize on one of the hottest specialty markets going today (setting up retirement plans for small business owners with 1 to 9 employees), you’ll want to brush up on IRA vs 401k and other important considerations.First, consider that a small business retirement plan, now more than ever, is the best way to defer large amounts of tax-deductible dollars. Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), self-employed taxpayers now have unprecedented incentives to save for retirement. A business owner’s decision is quite literally whether to keep company profits… or send them off to Uncle Sam.OWNER GETS MOREIt’s no secret the allure of a small business retirement plan is directly related to benefits available to the owner. The greater the owner’s share of the overall plan, the greater the interest. Before the new tax legislation, restrictions on owner’s benefits

In January 2006, retirement planning became even more complicated with new Roth type accounts being available for 401k and 403b plans. If your employer chooses to offer this option, you may now be given the choice of making tax deductible or non tax deductible contributions.Employers may amend their plan documents to allow for the new options provided for under recent tax legislation. However, they are not required to make this option available at this time. If implemented, this option would enable employees to make some, all, or none of their contributions either tax deductible or non tax deductible.The Roth IRA allows for tax free distributions whereas the traditional IRA has a taxable distribution. Of course, there is a tax deduction for the traditional IRA, but not for the Roth. Unlike the Roth IRA, there are no income limits of any kind on the new Roth 401k/403b. Therefore, for those whose incomes exceed the Roth IRA limits, it presents a great opportunity to contribute to a Roth type product.The tax free distribution on both the Roth IRA and the new Roth type 401k/403b is available at age 59 1/2. One major difference

When you contribute to your 401k, you are assuming your employer is actually forwarding the money you’ve invested to your mutual fund company. How do you really know your money is being invested as you’ve directed? The Department of Labor has already identified scores of companies who have misappropriated money intended for their employee’s retirement funds. Given today’s financial environment, it is essential you’re keeping a close eye on your money. By law, a company can only hold money intended to be invested for your 401k or retirement plan for 15 days.Here are 10 warning signs too look out for, courtesy of the Department of Labor (www.dol.gov)1. Your 401(k) or individual account statement is consistently late or comes at irregular intervals 2. Your account balance does not appear to be accurate 3. Your employer failed to transmit your contribution to the plan on a timely basis 4. A significant drop in account balance that cannot be explained by normal market ups and downs 5. 401(k) or individual account statement shows your contribution from your paycheck was not made 6. Investments listed on your statement are not what you authorized 7. Former

The 5304 Simple IRA Form Provides Clear Instructions For Opening A Retirement AccountThe 5304 simple IRA IRS form is used in order to establish a simple IRA account.Employers must complete the 5304 simple IRA form before it can begin making contributions on behalf of its employees.Steps to Follow Before Employers Can Establish a Simple IRA There are other steps to follow before a plan can be established along with completing the 5304 simple IRA form. Employers can use the IRS simple IRA plan model to establish this retirement savings program for employees. Also, employers may use a simple IRA plan that banks, insurance companies and other qualified institutions may offer. Form 5305 simple IRA is used if the contributions will be deposited into a designated financial institution, such as Fidelity Investments or Franklin Templeton. Form 5304 simple IRA is used if each employee is allowed to select his or her own financial institution to receive the contributions. Employers must ensure that all eligible employees receive the necessary information about the simple IR plan that the company is offering. The standard rule is to provide the information each year prior to the