Bradi Dahmen | Steps to evaluate a retirement plan for your business | Business World | wenatcheeworld.com
CNC Financial Group LLC
By Bradi Dahmen
If you have yet to develop a retirement plan for your business, or if you're not sure the plan you've chosen is the right one, here are some things to consider:
A simplified employee pension plan (SEP) is funded by employer contributions only. SEP contributions are made to separate IRAs for eligible employees.
Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRAs blend employee and employer contributions. For example, some employers match employee contributions up to 100% of the first 3% of compensation. Others may contribute 2% of each eligible employee’s compensation. It’s up to the employer to decide the formula based on what works best for the business.
A 401(k) is primarily funded by the employee; the employer can choose to make additional contributions, including matching contributions.
With the SEP-IRA, only employees who are at least 21 years old, earn at least $650 in compensation, and have been employed in three of the last five years must be covered.
Bradi Dahmen is the director of Wealth Management for the CNC Financial Group. She can be reached at (509) 663-1661.
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