Best Financial Advisors in Wesley Chapel, FL

Q: I'm a small business owner. What's one thing I can do to attract employees?nnA: To stay competitive, your business should offer a retirement savings plan. There are 4 types to consider:nnSimplified Employee Pension (SEP) IRAnThe SEP plan is funded solely by you, the employer, but each employee opens an IRA and chooses their own investments. There are minimal startup and operating expenses, and contributions are 100% vested right away. You must make contributions for all employees who are over 21 years old and have worked for the business in at least three of the last five years, provided that in the year the employee becomes eligible, they earn more than the minimum indexed compensation amount. The contributions are tax deductible for the company, and all earnings grow tax deferred until the participants withdraw them. nnSIMPLE IRAnA savings incentive match plan for employees (SIMPLE) gives small employers an easy way to contribute toward their employees' retirement. The startup and maintenance costs are very low compared to qualified plans. A SIMPLE IRA is funded jointly by employees' elective salary deferral contributions and employer contributions. Like the SEP, all contributions are tax deductible.nn401(K) Profit-Sharing PlannA 401(k) profit-sharing plan comprises both employee salary deferrals and matching employer contributions. Typically, plan participants select their own investments, including a Roth option, which allows for either pretax or after-tax salary deferrals. The business also can make profit-sharing contributions among all eligible participants. Per IRS rules, a 401(k) profit-sharing plan must have a vesting schedule that states an employee's percent ownership of the employer's contribution to the fund (employee contributions are 100% employee owned). nnEmployee Stock Ownership Plan (ESOP)nAn ESOP is set up via a trust fund through your company to make annual contributions to individual employee accounts, which are used to buy company stock. Or your company can issue new shares to an ESOP, deducting their value (for up to 25% of covered pay) from taxable income. Employers can match employee contributions with company stock, which may be worth more than a matching cash contribution. The stock is typically subject to a vesting schedule, and employees pay no tax on the contributions until they receive the stock when they leave or retire.nnThe type of retirement plan you choose will depend on your unique situation – there is no one size fits all. Get guidance from a professional to help determine the best plan.nnChanges in tax laws or regulations may occur at any time and could substantially impact your situation. You should discuss any tax or legal matters with the appropriate professional. These plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.