for my office with my specific needs…
I currently have a 401k plan in place with Safe Harbor election. I feel like I
pay too much to administer it. I would like to find
a retirement plan that is lower cost to me/the office.
qualified plan that my staff can defer money to, without me having to pay
administrative costs and me having to match any percent of income. I am
not interested in being able to defer anything myself.
Here was your criteria from above:
1. I am not concerned about how much I can defer personally, assume
I don’t have to defer anything myself.
2. I want the lowest cost (possibly free?) plan that can be run.
3. My staff does want to defer more than 5k (Simple IRA limit) per year
If I understand it correctly… if I contribute 1,2,3% (or whatever %) of my
salary, then I have to contribute to everyone the same %? What are your
thoughts and pros and cons of that?
Well, you asked us to assume that you didn’t want to contribute. Otherwise, you
are correct, that’s how a SEP works. SEPs work well when the owner is the only
participant or when the owner has been “employed” longer than the
other employees (read a lot of turnover) and as a last minute thought.
Who will administer the simple IRA? Can I do it through Fidelity who would
house the investments?
Sort of… you’ll still be responsible to make sure everything’s being
The 3% contribution would apply to who?
Would they have to qualify?
Would it be every staff member?
plan and the eligibility requirements.
Is that $ fixed or subject to change?
many allow for a change from time to time if not annually
I think you need to sit down with your CPA to narrow in on what you need based
upon your criteria and specific circumstances…