A 529 plan is a savings tool with tax advantages and a design that makes it an optimal choice for college planning. These plans are also considered qualified tuition plans, which are sponsored by educational institutions and state agencies. They are authorized by the Internal Revenue Service Code in Section 529. The two classifications of these plans include prepaid tuition plans and college savings plans. Each of the 50 states sponsor one or more types of 529 plans. Several universities and private colleges also sponsor prepaid tuition plans. Differences Between College Savings Plans And...Read More
As a small business owner, you may want a better retirement plan – one that will let you and your key employees save much more for retirement. If the annual contribution limits on standard retirement plans disappoint you, you should know about these alternatives. Simplified Employee Retirement Plans (SEPs). A SEP allows your business to simply set up and fund retirement accounts for your workers – and for yourself. Most SEPs don’t even have to file annually with the federal government. Employer contributions are 100% vested from the start, and you can even supplement the SEP...Read More
Most families that start 529 college savings plans have done their “homework” about these programs. Missteps are made, though, often with the distribution of 529 plan assets. Here are some of the major gaffes, and the major factors anyone should think about before enrolling. Assuming a university will withdraw 529 plan assets for you. When the time comes, you have to tell the 529 plan that you need the money and specify the payee. Typically, a 529 program offers you either a check written out to you, to your student, or a payment made directly from the 529 plan to the university. There...Read More
Are you self-employed? If so, the SEP IRA may be the ideal low-cost, easily administered retirement savings plan for you. This is a simple pension plan using a traditional IRA. In addition to an IRA for yourself, you can create IRAs under the plan for any employees you may happen to have – and all this can be done with lower administrative fees and less paperwork than other types of retirement plans.1 You get tax-deferred compounding of pre-tax dollars. As you contribute pre-tax dollars to a SEP IRA, you effectively lower your tax bill as a consequence. The money in the IRA grows...Read More
Here’s an important reminder: April 15 is the deadline for funding your IRA for 2012. (If you have a SEP IRA, you have until October 15 if you filed an extension on your personal tax return.) You may contribute up to $5,000 to a traditional IRA or a Roth IRA for the 2012 tax year. If you were 50 or older in 2012, your contribution limit is $6,000. (If you own multiple IRAs, your total IRA contributions for 2012 cannot exceed $5,000/$6,000.) Please note that income phase-outs may limit Roth IRA contributions. Single filers and heads of household can make a full Roth IRA contribution...Read More
Fiduciary Liability Alert for Employers – How would you like to receive a letter from the Department of Labor?
A letter threatening your company with a federal lawsuit filed on behalf of its retirement plan participants? The threat is real, and too many employers distracted from the mechanics of the retirement plans they sponsor succumb to it. Settlements and litigation make headlines. So how do you make sure that you are living up to the new and more stringent rules and regulations aimed by the DoL at fiduciaries? It is essential to turn to a Registered Investment Advisor for an independent, third-party view of your company’s qualified retirement plan. A good RIA can help you evaluate the...Read More