Retirement Plan Optimization | October 1 Deadline | Rea CPA

Optimize Your Retirement Plan To Maximize Results

If you’ve never taken the time to learn how valuable your retirement plan can be for your business, now is your chance.

Six Reasons To Schedule Your Meeting With A Retirement Plan Specialist By October 1

Has it been a while since you talked with a retirement plan specialist? If so, how can you be sure that your retirement plan still addresses your company’s unique needs? You could be missing out on some plan features, service or a more cost-effective solution. Your retirement plan team can easily evaluate your current retirement plan to determine if a better option exists for your company.

You want (and need) your SIMPLE IRA or Safe Harbor 401(k) plan to be effective in 2020, and it isn’t going to establish or adapt itself. Now is the time to implement or review your plan as the Oct. 1 deadline will be here soon. A retirement plan specialist will not only help you meet the deadline; they can ensure your plan is optimized to ensure maximum results.

Also Read: Should You Offer a 401(k) Plan?  

If you’ve never taken the time to learn how valuable your retirement plan can be for your business, now is your chance. The following six reasons should be incentive to schedule a meeting to discuss your company’s retirement plan:

  1. Your company does not have a retirement plan. Offering a retirement plan to your employees is more than a great recruitment tool – it can also help further your business’s profits. A retirement plan administration professional can explain further.
  2. You have more than two employees with a SEP Plan. Time changes everything, which is why it’s a best practice to meet with a retirement plan specialist regularly to ensure that your plan still addresses the unique needs of your company in the most cost-effective way possible. If there are alternative options for your business, your retirement plan team will let you know, will help you decide on a course of action and will guide you through the process.
  3. You are a business owner who maximizes deferrals every year with a SIMPLE IRA. If this is the case, you might want to consider a Safe Harbor 401(k) plan in 2020 for additional tax deferral. SIMPLE IRAs do not offer the ability to defer Roth contributions, so upgrading to a Safe Harbor 401(k) plan will provide participants with the flexibility to defer income on either a pre-tax or after-tax basis.
  4. You receive corrective distributions every year and have a 401(k). You could have a retirement plan designed that could alleviate this problem as well as maximize the benefits your company receives for actively participating in your employees’ retirement strategy.   
  5. You offer no profit-sharing option even though you maximize deferrals every year under your Safe Harbor 401(k). For these business owners, a better plan design might be to maximize profit-sharing contributions while limiting the amount that has to be provided to employees. Utilizing a cross-tested profit-sharing plan could save you money if the majority of your company’s employees are younger.  
  6. You max out your profit-sharing plan every year. If this is the case, it’s likely time to add a cash balance option to your retirement plan. This is a great way for business owners because it allows for higher employer-contribution deductibles for owners. Speak with your retirement plan team to learn more.

Remember, a new Safe Harbor 401(k) plan must be set up for 2019 no later than Oct. 1, 2019.  After the deadline, you will have to wait until Jan. 1, 2020. Email the retirement plan administration specialists at Rea & Associates to learn how you can maximize the benefits of offering a plan at your company before the deadline passes you by.

By Brigette Lafferty, QPA, QKA (Zanesville)

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