Michael Milazzo photo

Michael A. Milazzo, CLU, ChFC

Registered Principal

 

The Meridian Financial Company

3350 Club Villas Dr SE, Unit #1303

Southport, NC 28461

 

Phone:  631-979-4223

Fax:      910-854-0002

 

Email: meridian@ae.cadaretgrant.com

Website: www.merfinco.com

March/April 2018

A Simple Retirement Benefit

A Simple Retirement Benefit

Looking for a simple way you and employees can save for retirement? With so many options, deciding can be hard. But the SIMPLE (Savings Incentive Match Plan for Employees) IRA is one such plan, allowing employees and employers to contribute to IRAs set up for employees.


Designed for Small Business


If your company had no more than 100 total employees who earned $5,000 or more during the preceding calendar year and does not have an existing retirement plan, you qualify to set up a SIMPLE IRA plan any time before October 1 of the year it is established. You have a choice of two plan models.


With the first, you must match every employee’s contribution dollar-for-dollar up to 3% of each individual’s compensation, (to certain annual limits). You may choose to make a matching contribution of less than 3%, but greater than 1%, in no more than two out of five years.


The second formula is a non-elective contribution of 2% of each employee’s compensation up to $270,000 in 2017 and up to $275,000 in 2018. With both, employees immediately vest. Remember, you may be an owner, but you’re also an employee.*


Watch Withdrawals!


Participants may take distributions from a SIMPLE IRA without penalty (but subject to ordinary income taxes) after age 59 ½, and before that age under certain exceptions. They include disability, qualified higher education expenses and up to $10,000 for first-time home-buying costs.
Non-qualified distributions taken before that age incur a 10% additional tax after you participate in the plan for two years or a 25% additional tax during the first two years of participation.


For Employers


If you maintain this plan, you must contribute to each employee’s IRA (either the match or mandatory 2%) by your tax filing deadline, plus extensions.
Employees may electively contribute up to $12,500 using the employee deferral option, plus another $3,000 if they are age 50 or older. Talk to your financial professional about how a SIMPLE IRA or other qualified plan might fit with your business.


*https://www.irs.gov/retirement-plans/simple-ira-plan-faqs-contributions


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Securities and Advisory Services offered through Cadaret, Grant & Co, Inc, a Registered Investment Advisor and Member FINRA/SIPC. The Meridian Financial Company and Cadaret, Grant & Co., Inc. are separate entities. I am registered to sell Securities in the following States: NY, NJ, PA, NC, FL, ID.
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