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Investment FAQS

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Profit Sharing Plans

A plan that allows for discretionary annual contributions by the employer.

Key Benefits of a Profit Sharing Plan:

  • Employers can vary the amount they contribute to the plan.
  • Vesting schedule is determined by employer.
  • Withdrawals are governed by the plan document and may be restricted.
  • Employers may offer participant loans.

Who Can Establish:

  • Self-employed Persons
  • Partnerships
  • S-Corporations
  • C-Corporations
  • Non-profit Groups

Annual Contributions:

  • Up to the lesser of 25% of compensation or $49,000 per employee. Total deductible contributions cannot exceed 25% of total eligible compensation.
  • Maximum eligible compensation: $245,000.

Profit Sharing Candidates:

  • Employers who wish to take on the responsibility of funding their employees’ retirement.
  • Employers who wish to motivate their employees by tying employer contributions to company profits.
  • An employer who does not desire an annual commitment to funding retirement or who may have cash flow inconsistencies due to business cycles or other causes.
  • Businesses who want more control than a SEP and are willing to pay the annual maintenance costs.

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


This site is designed for U.S. residents only. The services offered within this site are offered exclusively through our U.S. registered representatives. LPL Financial U.S. registered representatives may only conduct business with residents of the states for which they are properly registered. Please note that not all of the investments and services mentioned are available in every state.


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