|
Characteristic
|
401
K
|
�Simple
401K�
|
Profit
Sharing
|
Money
Purchase
|
SEP
IRA
|
Simple
IRA
|
|
Setup
& Maintenance
|
�
|
�
|
�
|
�
|
�
|
�
|
|
How
can I set it up?
|
Bank,
insurance company, brokerage service
|
Bank,
insurance company, brokerage service
|
Bank,
insurance company, brokerage service
|
Bank,
insurance company, brokerage service
|
Bank,
insurance company, brokerage service
|
Bank,
insurance company, brokerage service
|
|
Do
I need to file every year with the IRS with this
plan?
|
Yes
(A Qualified Plan)
|
Yes
(A Qualified Plan)
|
Yes
(A Qualified Plan)
|
Yes
(A Qualified Plan)
|
No
|
No
|
|
Do
I need additional professional help to maintain it
every year?
|
Probably
|
Probably
|
Probably
|
Probably
|
Probably
not
|
Probably
not
|
|
Contributions
|
�
|
�
|
�
|
�
|
�
|
�
|
|
Am
I (as the employer) REQUIRED to contribute every
year?
|
No
|
Yes
|
No
|
Yes
|
No
|
Yes
|
|
What
are my maximum employer contributions per year?
|
15%
of eligible employee�s compen-sation
|
15%
of payroll usually
|
15%
of eligible employee compen-sation
|
25%
of eligible employee compen-sation
|
15%
of eligible� compen- sation
to employees
|
Required
match percent- age
|
|
Are
my employees allowed to make tax-deductible
contributions?
|
Yes,
the lesser of 25% of salary or $10,500
|
Yes,
the lesser of 25% of salary or $6,000
|
No
|
No
|
No
|
Yes,
lesser of 25% of salary or $6,000
|
|
What
is the limit on ALL contributions (employer and
employee) per year?
|
25%
of salary up to $30,000 a year.
|
25%
of salary up to $30,000 a year.
|
25%
of salary up to $30,000 a year.
|
25%
of salary up to $30,000 a year.
|
15%
of salary up to $30,000 a year to employees,
13.045% per year if� self-employed
person up to $24,000
|
�Generally
$12,000 a year.
|
|
Can
I contribute to more than one plan?
|
Add
Any IRA plan
|
Add
Any IRA plan
|
Add
Any IRA plan
|
Add
Any IRA plan
|
Can
be primary or sup- plemental
|
Can
be primary or sup- plemental
|
|
Do
I need to have ALL employees set up with it?
|
Yes,
any full-time employee over 21 and with at least
one year of service MUST be included.
|
Yes,
generally any full-time employee over 21 and with
at least one year of service MUST be included.
|
Yes,
generally any full-time employee over 21 and with
at least one year of service MUST be included.
|
Yes,
generally any full-time employee over 21 and with
at least one year of service MUST be included.
|
Yes,
generally any full-time employee over 20 and has
been with the company 3 of past 5 years.
|
Owner
can vary the require- ments.
|
|
Other
|
�
|
�
|
�
|
�
|
�
|
�
|
|
Can
I borrow from this plan?
|
Yes
|
Yes
|
No
|
No
|
No
|
No
|
|
Is
there a vesting requirement for this plan?
|
Can
be
|
No
|
Yes
|
Yes
|
No
|
No
|
|
When
can I start withdrawing from the plan (without
penalty)?
|
Usually
at age 59 1/2
|
Usually
at age 59 1/2
|
Usually
at age 59 1/2
|
Usually
at age 59 1/2
|
Usually
at age 59 1/2
|
Usually
at age 59 1/2
|
|
Other
|
You
still pay Social Security and Medicare tax on 401K
contributions
|
You
still pay Social Security and Medicare tax on 401K
contributions
|
�
|
�
|
You
still pay Social Security and Medicare tax on 401K
contributions
|
�
|
|
Eligibility
to Participate
|
�
|
�
|
�
|
�
|
�
|
�
|
Sole
Proprietor
|
No
|
No
|
Yes
|
Yes
|
Yes
|
Yes
|
Sole
Proprietor- Employees
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Partnership
- Partners
|
No
|
No
|
Yes
|
Yes
|
Yes
|
Yes
|
Partnership
- Employees
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
|
LLC
- owners
|
No
|
No
|
Yes
|
Yes
|
Yes
|
Yes
|
|
LLC
- employees
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
|
�S�
Corp � Owners
|
No
|
No
|
No
|
No
|
Yes
|
Yes
|
|
�S�
Corp - Employees
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
Yes
|
|
�C�
Corp
|
Yes
|
Yes
|
No
|
No
|
Yes
|
No
|