401 (k) Plans
Key Benefits of a 410 (k) Plan:
A 401 (k) is a qualified plan that allows for
employee pre-tax contributions. The value of a 401 (k)
investment grows tax deferred until withdrawn, when
it is taxed as ordinary income
Permits pre-tax salary
Due to complicated discrimination
testing and tax reporting, third party administrative
services are required
are tax deductible
Employer matching and Profit
Sharing contributions are optional
Vesting schedule can be
applied to employer contributions
Participant loans are available
Withdrawals are governed
by the plan document and may be restricted
Who Can Establish:
Annual Contributions: (based on 2009 limits)
- Non-Profit Groups
401 (k) Candidates:
Employees can defer up
to $16,500 ($22,000 if age 50 or older).
Deferrals and employer
contributions cannot exceed the lesser of
100% of employee’s compensation or $49,000
per employee. Catch-up deferrals are not included
in this limit.
Total deductible employee
contributions to the plan cannot exceed 25%
of total eligible compensation. Employer contributions
do not include deferrals.
Maximum eligible compensation:
Employers who wish to have
the responsibility of funding retirement belong
to their employees.
Employers who are too large
to open or maintain a SIMPLE IRA plan.
Profitable and growing
companies who wish to start a retirement plan
and can afford to maintain one.
Employers with a large
number of highly compensated employees.
Employers who have not
been able to make consistent annual contributions
to their profit sharing plan.
Employers who believe their
defined benefit plan is getting to expensive
Contact a LPL Investment
Consultant to go over your options for retirement.
Financial Advisors of LPL Financial are Registered Representatives with, and Securities, Advisory Services and Insurance Products are offered through LPL Financial and its affiliates, Member FINRA/SIPC. LPL Financial is not a registered broker/dealer. Investments are: Not FDIC insured, may lose value, are not bank guaranteed, and are not obligations of LPL Financial. LPL Branch Office located at 1311 Carolina Ave, Washington, North Carolina 27889. Investment Advisory Services offered through LPL Financial, a SEC Registered Investment Advisor
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