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Research Outline
Prepared for Sunil | Delivered January 27, 2020
Small Businesses Retirement Plan Options
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Goals
Determine the available options to grant 401K to the employees, the cost of this benefit to the employer per head, and the best approach for small businesses. The information will be used for the budget planning of a small business.
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Early Findings
Small Businesses Retirement Plan Options
For the retirement plan of the employees of an S Corp-type of small business, the typical cost for employers will range from
$2,000 to $4,000 a
nnually in administrative and insurance expenses.
For those plans that need an S Corp employer to have a contribution, the percentage is usually
3-4%
per employee.
The "
401(K) small business retirement plan
" is for all types of public or private companies with over 20 employees.
This plan is one of the
typical retirement plans
that are being offered by companies.
This plan is more flexible with regard to investment options such as mutual fund investments.
Employees can have a maximum contribution of
$18,500
in defered pay. For 50 years old and older employees, the amount is
$24,500
.
The maximum total contribution is
$54,000
.
Companies can have the option to
contribute the same amount
as what their employees are contributing.
There is also an option to contribute a maximum of
25%
of an employee's pay through profit sharing. The maximum total amount for this is
$55,000
.
Some companies are offering their services to
maximize the contributions
of the employers and their employees on their retirement plan benefits.
Benefits of Retirement Plans
These retirement plans can help
secure the future
of the companies and their employees.
Having a retirement plan can make a company
more attractive
for employees.
Employers who offer these plans are also
eligible for tax deductions
.
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