Helping Florida’s Bay Area Businesses Offer Competitive Employer Sponsored Benefits.
Whether you are a small local business or a large corporation, the professionals at Focus Wealth Strategies can be trusted to guide you through the challenging process of choosing employer sponsored plan benefits for your entire team. Our financial firm is experienced in helping executives select and implement new employer sponsored benefits. We also provide on-going insight needed for principles and participating staff members to invest wisely and maintain their plans. Our goal is to create the ideal employer sponsored plan benefit packages so business owners can focus on managing and growing their company!
Simple & Sep Ira’s
Individual Retirement Accounts, also referred to as IRA’s, are the most basic forms of retirement accounts. While many people think of IRA’s as only individual accounts, employers can also help their employees establish and fund IRA accounts. IRA’s work by allowing the employee to set aside a specific amount of their income to invest for retirement. Simple and SEP IRA’s are two types of employer sponsored IRA’s.
Key Features of SEP IRA’s:
- SEP IRA’s stand for Simplified Employee Pension Plan.
- Provides a simplified method for employers to contribute to their employees’ retirement.
- Contributions are made by the employer only and the annual contribution amount is flexible.
- Employees cannot make contributions to their own accounts.
- The employer is required to contribute equally to all eligible employees.
Key Features of Simple IRA’s:
- Simple IRA’s stand for Savings Incentive Match Plan for Employees.
- Allow employers to make contributions toward their employees’ retirement in a simplified manner.
- Employees are not required to contribute, but if they do, they can choose to defer their income as a contribution through a salary reduction.
- Employers can choose between matching or nonelective contributions to their employees’ accounts.
401(k): Individual & Group Plans
One of the most common employer sponsored benefit plans expected by new employees is a 401(k). 401(k) plans provide employees a way to save for their retirement by allowing the employee to choose to defer a certain percentage of their salary into a 401(k) savings plan. Employers can also help their employees save for retirement and encourage them to take advantage of this type of plan by making a matching contribution that is tax-deductible. 401(k) plans are often complex and require a plan administrator to oversee maintenance, compliance, record keeping, IRS filings, and required testing.
Key Features of 401(k) Plans:
- Account is primarily funded by employee contributions.
- Employers can choose whether they want to contribute and how much—up to certain limitations.
- Allows larger deferral options and larger employer contributions than a Simple IRA plan.
Profit Sharing Plans
Profit Sharing Plans allow employers to share a portion of the company profits with their employees. These plans work by sharing a specific percentage of a company’s profits based on their annual or quarterly earnings with the company’s employees. This gives the employees a sense of ownership in the company. Employees know that if the company succeeds, they will be rewarded. This leaves the employees with a vested interest in the company’s overall success.
Key Features of Profit Sharing Plans:
- Contributions are made by employers as a percentage of the business’ profits.
- Employers have flexibility in how they choose to setup contribution terms.
- Employers must create a written plan for how the plans will bemanaged.
- Employees do not always receive equal contribution amounts. For example, it is common for executive level employees with a higher salary to receive higher profit sharing payouts than lower level employees.
Annual Reviews With Business Owners
Annual reviews are essential to ensuring business owners have the information they need to make necessary changes to their business in the following year. Even if the business owner does not need to make any changes in the coming year, it is important for them to be well informed about anything relating to their company’s financial status. At Focus Wealth Strategies, our team of professional financial advisors conduct annual reviews with business owners to ensure they are on the right track to meeting their goals and to discuss any changes that need to be made moving forward.
Continuing Education For Employee Participants
Our team is not only dedicated to helping employers establish their employer sponsored plan benefits, but also to encouraging employee participation in the plans. The best way to encourage employee participation in these plans is to offer continuing education to ensure employees are aware of their options and why they should choose to participate in the plan.
Key Discussion Points of Continuing Education for Employee Participants Include:
- Educating employees on the importance of long-term investing.
- Advising on the importance of beginning to save early for retirement.
- Educating employees on the impact of taking loans or early distributions from retirement accounts.
- Discussing key points of the specific plan options your business offers.
- Help employees determine how much they should be contributing to their retirement savings.
- Help employees understand their investment options of the employer sponsored benefit so they can diversify their portfolio.
- There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Start Discovering New Employer Sponsored Benefit Packages To Offer Your Employees Today!
Ready to discover the options your business has for offering employees competitive and attractive employer sponsored plan benefits? Contact Focus Wealth Strategies through our online contact form or by calling our Brandon office at (813) 305-0411 or our Bradenton office at (941) 776-0589 today! Our team of professional advisors can help you select the plan options that are right for your business, establish new employer sponsored benefit plans, and manage and maintain your employer sponsored plans.
This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation. In no way does the advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.
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