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Five Star Retirement Professionals, LLC offers many retirement plan options to meet the varied needs of businesses owners across the United States. Our plans are designed to cover businesses ranging from one-person shops to companies with over 2000 employees. On average, our client companies consist of approximately 20 employees and the majority of our plans are geared toward small business owners.

In order to best serve the needs of employers like you, we will provide you with different plan scenarios based on census information and other individual factors. We strive to help you achieve the best choice for your small business and are proud to offer small business owners assistance in choosing the plan that’s right for them. Once such a plan is chosen, we take pride in working with both the employer and investment advisor to ensure proper plan administration and overall retirement plan success.

 
1425 Prince Street
Houston, TX 77008
P: (713) 572-6630
F: 713-572-8097
 

401k Plans

Across America, 401(k) plans have become widely accepted and utilized by business owners. Because they offer excellent tax breaks to employers, while at the same time providing simple and convenient savings for employees, they have become quite popular among all types of businesses.

These plans are often designed with features such as participant loans, eligibility requirements, vesting and distribution options in order to be flexible and well suited to the needs of diverse businesses. When such plans are properly designed and implemented, they can often aid in reducing costs, leading to greater employee recruitment and retention. For employers, that’s a great thing.

There are a number of ways in which 401(k) plans can benefit your business. Most importantly, they offer you as an employer valuable tax deductions for contributions you make, while allowing for salary deferrals before federal income taxes for your employees. In addition, they are an excellent tool for retirement planning, certain to offer your employees valuable savings, which will aid them in achieving a secure lifestyle when retirement comes. This is of great value to you because in many cases such plans offer incentives to employees to continue a career with your company, leading to increased employee satisfaction, recruitment and retention. Of course, satisfied employees are always a benefit to employers like you. All in all, such plans typically result in a win-win situation.

Options for 401(k) Contributions

There are two types of contributions made to 401(k) retirement accounts – Employee and Employer contributions.

Employee contributions
In order to plan for a comfortable retirement, this type of contribution allows your employees to make pre-tax salary deferrals as well as rollover contributions from other retirement plans.

Employer contributions
As an incentive to your employees, you can elect to make tax-deductible matching or profit-sharing contributions on your employees’ behalf. Should you choose to take advantage of this option, you may find that your employee retention and satisfaction greatly increase. This is of benefit to you because satisfied employees make your job as business owner much easier. Greater morale and less turn over are often a result of implementing this type of contribution option.

Safe Harbor 401(k) Plans

This type of retirement plan allows for maximum salary deferrals to be made by highly compensated employees, while avoiding the risk of corrective refunds, which occur when plans fail the ADP or ACP Discrimination Tests. Many business owners prefer this type of plan because they automatically satisfy the requirement of these tests.

Profit-Sharing Plans

These plans are unique in that you, as the employer, are responsible for funding all contributions and can tailor them at your preference. For instance, profit-sharing plans may be designed in a number of ways, including offering contributions to employees in proportion to individual salaries or favoring business owners, high-income participants or more senior employees.
Another benefit to you is the tax deduction received for contributions made to such plans.

Methods of Allocation

Some popular methods of profit sharing allocation include Social Security Integration, Salary Proportionate, Age Weighted and New Comparability, which allow employers like you to provide different contributions for varied employee segments.

The benefits of profit sharing plans such as those mentioned above include simple administration, as contributions are typically made once annually, excellent employer tax breaks and the ability to make discretionary contributions to your employees’ retirement savings.

 

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