© 2008
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
http://us.pioneerinvestments.com/content/nba/landing.jhtml
Experts
estimate that Americans will need 70% to 90%1 of their pre-retirement
income to maintain their current standard of living when they stop working.
As
an employer, you have an important role to play in helping your employees save.
By starting a retirement savings plan, you can help your employees save for the
future. Currently only 43%2 of small businesses with 25 to 99 employees
do not sponsor a retirement plan. By sponsoring a retirement plan, you can establish
a competitive advantage, as a retirement plan can help to attract and retain qualified
employees. A retirement plan may also offer tax savings to your business and help
secure your own retirement.
Can you afford not to have a
retirement plan? Besides the security of knowing you are funding your own retirement,
here are some other reasons why establishing a retirement plan may be one of the
smartest business decisions you'll make:
Tax Advantages
A
retirement plan can have significant tax advantages:
- Contributions
generally are deductible by the employer when contributed;
- You
may qualify to claim a tax credit for part of the ordinary and necessary costs
of starting a plan. The credit equals 50% of certain plan administration and education
start-up costs, up to a maximum of $500 per year for each of the first three years
of the plan.
- Contributions are not taxed until distributed; and
- Money in some types of retirement plans can grow tax-free.
Employee
Retention
- Competitive advantage: If you have employees, or will be
adding them in the future, offering a retirement plan may be a powerful recruiting
and retention tool.
Other Benefits
In addition
to helping your business, your employees and yourself, you will benefit from:
-
Plan flexibility: there are many choices available which offer flexible funding
options, so you can establish a plan that works for you;
- "Catch-up"
rules: In some types of retirement plans, employees age 50 and over can make special
catch-up contributions.
These are just some of the
advantages and benefits as an owner to taking responsibility for employees saving
for retirement. As an employer you have a variety of options and choices-all depending
on your business, whether or not you have employees, and the commitment you want
to make to fund your retirement.
Deciding which type of
retirement benefit to offer may be one of the most important decisions you can
make in developing a comprehensive business plan. The right type of retirement
plan may attract talented employees in a competitive marketplace and help you
build a secure financial future in retirement.
To
find out more about a business retirement plan offer from Merrill Lynch click
here: National
Business Association - Merrill Lynch and Pioneer Investments Uni-K Plan.
Any
information presented herein about tax consideration affecting financial transactions
or arrangements is not intended as tax advice and should not be relied upon for
the purpose of avoiding any tax penalties. Neither Merrill Lynch nor its Financial
Advisors provide tax, accounting or legal advice. Professional advisors should
be consulted for any planned financial transactions or arrangements that may have
tax, accounting or legal implications.
1Choosing a Retirement
Solution for Your Small Business, September 2005, U.S. Department of Labor, Employee
Benefits Security Administration.
2 22005
IRS Publication 3998.
© 2008 Merrill Lynch, Pierce, Fenner &
Smith Incorporated.
Member Securities Investor Protection Corporation (SIPC).
