Since its inception in 1980, the 401(k) plan has become a key tool in helping Americans build wealth. In fact, the number of people who have become millionaires through their 401(k) plans reached 537,000 in 2024, a 27% increase from 2023.1 The SECURE 2.0 Act, passed in 2022, introduced new features designed to make 401(k)s even more appealing to workers. The following features are optional for employers, and while some have been adopted, others have yet to gain traction. Emergency … [Read more...]
Could Employee Ownership Be Part of Your Succession Plan?
An employee stock ownership plan (ESOP) is a type of qualified retirement plan that enables a business owner to gradually transfer ownership shares to employees. Moreover, establishing an ESOP sets up opportunities for the owner of a closely held business to cash out (in whole or in part) in the future, while keeping the company going for employees and the community. An ESOP may be a good option for small-business owners who don't plan to pass the reins to family members when they retire, but … [Read more...]
What is a self-employed retirement plan?
A self-employed retirement plan is a tax-deferred retirement savings program for self-employed individuals. In the past, the term "Keogh plan" or "H.R. 10 plan" was used to distinguish a retirement plan established by a self-employed individual from a plan established by a corporation or other entity. However, self-employed retirement plans are now generally referred to by the name that is used for the particular type of plan, such as SEP IRA, SIMPLE IRA, SIMPLE 401(k), or self-employed 401(k) … [Read more...]
What is a SIMPLE?
There are many types of employer-sponsored retirement plans. One that may appeal to small businesses and to self-employed individuals is the savings incentive match plan for employees (SIMPLE) because, as the name implies, it is easy to set up and administer, and employers are allowed to take a tax deduction for the contributions that are made. SIMPLEs can be established by small businesses that have 100 or fewer employees (who were paid at least $5,000 or more in compensation during the … [Read more...]
Retirement Planning – Employee/individual contribution limits
Retirement Planning Employee/individual contribution limits Elective deferral limits 2024 2025 401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs 1 [Includes Roth 401(k) and Roth 403(b) contributions] Lesser of $23,000 or 100% of participant's compensation Lesser of $23,500 or 100% of participant's compensation SIMPLE 401(k) plans and SIMPLE IRA plans1 Lesser of $16,000 or 100% of participant's compensation Lesser of $16,500 or 100% of participant's … [Read more...]
