Retirement Plans for Businesses
At Old Dominion Investment & Retirement Advisors we build tailored retirement plans for our clients to match their specific goals and objectives. Different types of retirement plans are available for different sized businesses, and we can help you determine which is best for your situation.
401(k)
A 401(k) plan or 403(b) plan is one of the most important employee benefits that a company can offer. A good employer sponsored 401(k) or 403(b) should be flexible for the employees, making it easy to understand and participate in with a balanced selection of investment options to meet all risk tolerance levels and financial education experiences. At the same time for the employer, it should be easy to administer, be affordable and have a dedicated team like the ones that we work with, there to answer questions and to help.
As members of Retirement Plans Advisors Group (RPAG), a national organization of independent advisors dedicated to excellence in 401(k) plan management, we have access to thousands of low-cost investment choices and nearly one hundred 401(k) platforms to help find the plan that is right for your business. Below are the two most common types of 401(k) plans.
Traditional 401(k)s
Traditional 401(k) plans are pretax savings accounts. Employee contributions go into the account before they are taxed, which in turn, makes an employee’s taxable income lower. Upon retirement, a person will pay taxes on the amount that they withdraw from the account. In a traditional 401(k), a person is usually eligible to start receiving distributions at age 59 ½ without penalties.
Roth 401(k)s
Roth 401(k) plans are after tax retirement savings accounts. This means contributions are taxed before they enter Roth 401(k) account. Upon retirement, a person will receive tax-free withdrawals on their contributions and growth once they are 59 ½ AND they have held their account for five years.
As an independent firm, we focus solely on serving your needs and acting in your best interests at all times. Donald Unger, our president, is not only an Investment Advisor Representative, but has also received the AIF accreditation from the Fi360 Organization, showing his dedication to the 401(k) space. We work with all of the major 401(k) and 403(b) plan platforms so that we can help our clients find the right plan platform. We also have a network of Third Party Administrators (TPAs) that you might want to consider when a customizied 401(k) or 403(b) solution is more appropriate than an “off the shelf” plan design.
If you have not had your 401(k) or 403(b) plan “Benchmarked” in over two years, please give us a call today. We are happy to meet with you and provide this valuable service at no cost. With all the new features available today, you owe it to yourself and your employees to have the best possible 401(k) or 403(b) plan possible, and we can help.
IRA
SEP IRAs
A Simplified Employee Pension (SEP) IRA is available to business owners (with 100 employees or less) and self-employed individuals. SEP IRAs provide tax benefits to employers when they make contributions to employee’s accounts. Employers can contribute up to 25% of employees’ annual salaries into their accounts (capped at $61,000 for 2022), however employees cannot contribute money to their own accounts.
SIMPLE IRAs
The SIMPLE in SIMPLE IRA stands for Savings Incentive Match Plan. SIMPLE IRAs are available to small businesses that do not have any other retirement savings plan. Like a 401(k) plan, SIMPLE IRAs allow both employee and employer contributions, but with easier and less costly administration, as well as lower contribution limits. SIMPLE IRAs require employers to either contribute 2% of an employee’s annual salary (even if the employee does not contribute) or to match employee contributions at 3%. The annual max contribution for 2022 is $14,000 or $17,000, for those over 50.
