Wealth Prime Wealth Report

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A Brief Retirement Plan OverviewWhen it comes to retirement planning, there are many different vehicles for business ownersto choose from, including; traditional IRAs, Roth IRAs, profit sharing plans, SIMPLE 401(k)s,SEP IRAs, and more. It’s important to review the advantages and disadvantages of each withyour advisor or Third Party Administrator (TPA).DISADVANTAGES OF ROTH IRAS VSA ROTH 401(K) PLANRoth IRAs may seem very attractive given the taxbenefit. However, Roth IRAs are not available forowners with income over $203,000. A Roth 401(k)plan has no such limitation.DISADVANTAGES OF A TRADITIONAL IRA VSA 401(K) PLANTraditional IRAs are a popular savings vehicle,particularly for individuals who don’t have accessto an employer sponsored plan. However, a majordownside of an IRA is its contribution limits. You’reonly able to contribute $5,000 annually to anIRA and only $1,000 in catch-up contributionsif you’re over age 50. Versus a 401(k) plan, youcan contribute $19,000 annually and are allowed a$6000 catch-up contribution over age 50.DISADVANTAGES OF A SEP IRA VS A 401(K)W/ PROFIT SHARING PLANAnother popular plan available to all types ofemployers is a Simplified Employee Pension (SEP).SEPs allow an employer to make tax deductiblecontributions to an employee’s tax-deferred IRA.Most SEPs are free to employers to set up, but thisplan type lacks value and is an ineffective financialplanning tool. The downside of SEPs are many:• Limits: Annual contribution limits are thelesser of 25% of taxable income each year or$56,000.A 401(k) plan w/ Profit sharing plan allows for$56,000 in annual contributions for those under 50years of age, and $62,000 for those over 50. The401(k) plan w/ Profit sharing plan also allow tieredcontributions based on employee groups reducingexpense, and vesting schedules can be determinedbased on business goals.THE POWER OF THE COMBO-KThe charts below demonstrate the increase incontribution amounts you can receive and theresulting asset growth over 15 years, compared to a401(k) plan or 401(k) w/ profit sharing plan alone.BUILDING WEALTH WITHCASH BALANCE PLANSCash balance plans can help high-net-worthindividuals realize tax deductions and savingsrates up to 4x greater than a 401(k) plan alone.And business owners can contribute hundreds ofthousands of dollars to their retirement each year–experiencing significant tax benefits, as retirementcontributions are tax deductible.Benefits of cash balance plans include:• Reduce Taxes• Asset Protection• Attract and Retain Top Talent• Accelerate Retirement Savings• Flexibility and Portability• Expense: The employer must contribute 25%of total gross compensation to ALL eligibleparticipants equally. No variation by employeeis allowed.• Vesting: All contributions are immediately100% vested which can prove expensive to theemployer for shorter-tenured employees.4
Your Customized Retirement Planner and Wealth BuilderBelow is your individualized path to wealth through maximized contributions. As you cansee, when you combine a 401(k) plan, profit sharing, and cash balance plan, your retirementplan contributions can increase exponentially from $25,000 to $297,400.In addition, when you contribute your annual maximum contribution of $297,400, take alook at your wealth creation in 5, 10, and 15 years.Think of the possibilities, Sarah!What could YOU do with this extra financial freedom?5
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Page 7 and 8: Your Way to WealthNow that you’ve

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