One of our specialties is the design and implementation of qualified and non qualified retirement plans for our business clients. A business client is a corporation, pass-through entity, or a person who files a schedule C to Form 1040. Most of our business clients simultaneously have both 401(k) plans and Cash Balance plans. Implementing a 401(k) plan comes first because of its flexibility; a Cash Balance plan is implemented if you still have money available over and above your life style costs.
As we all know the purpose of a retirement plan is to attract and then retain employees in your business. However, we can never ignore the fact that these plans offer significant tax planning advantages as well as retirement planning for the shareholder(s), partner(s) or a Schedule C filer. Since it’s those “owners” that are contributing to the plan(s), the plan is designed around the needs of the contributors.
For both business entities and individuals, nonqualified plan options arise when you still have, after maxing out your qualified plan contributions, income exceeding lifestyle costs.
If you are an individual, we of course look at your IRA options, both traditional and Roth. Beyond that the next step is the 401(k) or 403(b) plan offered by your employer. We review your 401(k) plan document with you many times suggesting improvements that your employer can make.