With the 2025 tax year almost here, there’s news from the IRS about retirement savings. According to a recent announcement from the tax agency (Notice 2024-80), there will be increases in some retirement plan contributions next year due to inflation adjustments. However, with inflation coming down, not all types of retirement plans will see increases,
Starting in 2024, employers can offer their non-highly compensated employees the option to participate in emergency savings accounts that are linked to their company-defined contribution retirement plan accounts. This option was introduced in the SECURE 2.0 Act. Defined contribution plans include 401(k) plans. Employees can then make contributions out of their salary to fund their
The National Center for Employee Ownership (NCEO) estimates that about 6,500 U.S. companies have employee stock ownership plans (ESOPs). Many owners of closely held businesses use these plans as an exit strategy. Although ESOPs offer a variety of benefits, including significant tax advantages, they’re not right for every company. ESOP ABCs The IRS defines an ESOP
Years ago, employers could exclude part-time employees- those who work less than 1,000 hours per year in the business – from participating in 401(k) plans. That was before the Setting Every Community Up for Retirement Enhancement (SECURE) Act became law in 2019. The old rules made life simpler for small employers that preferred to avoid the
If you have a tax-favored retirement account, you generally must take the required minimum distributions (RMDs) each year after you reach the “magic” age. If you don’t take RMDs, you’ll be hit with an expensive federal tax penalty, unless an exception applies. The age that the RMDs kick in has been a moving target, thanks
Roughly one in five Americans in the workforce believe that “working for pay” will be a major source of their retirement income. This is according to the “2018 Retirement Confidence Survey” produced by the Employee Benefit Research Institute (EBRI). Nearly half of respondents believe paid work will be a minor source of retirement income for them.
In today’s tough economy, you may find yourself struggling to cover your day-to-day expenses. But rising interest rates are making traditional loans more expensive. In such an environment, you might consider borrowing funds from your 401(k) retirement account, if your plan permits it. But you’ll need to weigh the pros and cons before taking the plunge.
Are you new to self-employment? Working for yourself doesn’t mean you must forego tax-advantaged retirement savings. In addition to contributing to a traditional IRA, there are two basic retirement plan options that may make sense for self-employed individuals: Simplified Employee Pensions (SEPs) and SIMPLE IRAs. Here are the pros and cons of these plans. Important: For purposes
If you own a successful small business with no employees, you might be ready to set up a retirement plan. Or you might want to upgrade from a more-basic SIMPLE IRA or Simplified Employee Pension (SEP) plan. Here are two options – solo 401(k)s and defined benefit pension plans – to consider if you have healthy
Roughly one in five Americans in the workforce believe that “working for pay” will be a major source of their retirement income. This is according to the “2018 Retirement Confidence Survey” produced by the Employee Benefit Research Institute (EBRI). Nearly half of respondents believe paid work will be a minor source of retirement income for them.
