Business Retirement Plans

If you're self-employed or you run a small business or professional practice, Arrowhead Asset Management can help you create a cost-effective retirement plan that's easy to set up and maintain. Each plan offers:

• Valuable tax deductions: Plan contributions you make for you and your employees reduce taxable income, while contributions for your employees are generally deductible as a business expense.
• Tax-deferred growth: The earnings in your plan grow free of taxes until withdrawn, usually during retirement.
• Attractive investment options: Choose from over 10000 equity, bond, real estate, international, and money market mutual funds to build a diversified investment portfolio. We only work with no-load mutual funds or ETFs (electronically traded funds) with no sales commissions, and we keep our mutual fund expenses low so more of your money is invested.

Simplified Employee Pension (SEP) Plans:
Self-employed individuals and small businesses have an effective, affordable way to save for retirement. SEP-IRA plans allow you to make deductible contributions of up to 25% of an employee's annual compensation cap. An employee's compensation cap will be $245,000 for 2009. The maximum dollar amount that may be contributed for tax year 2009 is $49,000 per participant. Clearly, the SEP-IRA plan will give you significant tax savings potential and professional management.

Simple IRA Plans:
A low-cost, easy to administer retirement plan for small businesses with up to 100 employees or self-employed individuals. The Simple 401(k) plan offers most of the benefits of a 401(k) with no annual “fairness” tests to run or IRS reports to file. Best of all, you can choose from thousands of no-load mutual funds to help build your retirement savings.

As far as 2009 contributions go, an employee can contribute up to $11,500 if under 50 years of age and up to $14,000 if 50 years of age and older. Additionally, the employer can offer a matching contribution not to exceed the 3% of gross salary. After 2009 the limits will be adjusted annualy based on inflation indexing.

Individual 401(k) Plans:
The Individual 401(k) Plan allows self-employed individuals and small-business owners (and spouses) to save more for retirement.  Current tax rules allow employee tax-deductible contributions of 100% of compensation, up to $16,500 in 2009 (a maximum of $49,000 in 2009 when adding in employer matching contributions). Individuals who are age 50 or older can contribute an additional $5,500.00 "catch-up" contribution in 2009 and beyond. In other words, when employer matching contributions are not applied, an employee over 50 years of age can contribute up to $22,000 in 2009.

Keogh, Profit Sharing and Money Purchase Plans:

Profit-Sharing Plans (best for yearly fluctuating contributions):

• As the employer, you can vary contributions from year to year or even skip a year.
• Deduct contributions up to 25% of all participants' eligible compensation.
• Each participant's maximum allocation under all employer plans is 100% of compensation up to $49,000 for 2009.
• This is a good choice for businesses with fluctuations in cash flow.

Money Purchase Plans (best for consistent contributions):

• Make fixed contributions each year for every eligible employee as your commitment to retirement plan benefits. (Note: IRS penalties apply if contributions are not made each year.) 
• Deduct contributions up to 25% of all participants' eligible compensation.
• Each participant's maximum allocation under all employer plans is 100% of compensation up to $49,000 for 2009.

With Arrowhead Asset Management, all of the above plans are administered and invested through either Fidelity Advisor Services or TIAA-CREF, depending on your specific retirement plan needs.

For further information, contact Ralph Boschert to discuss which business retirement plan is best for you and your employees.