Cash Balance Plans Cash Balance Plans could be a good fit for your clients who make more than $200,000 and want contributions above $49,000. CPD can design a Cash Balance Plan in which: An owner, age 55, could possibly have an additional tax deduction of over $160,000 for 2011. That’s in addition to the amount contributed to a Profit Sharing Plan and a potential tax savings of over $72,000 (see below). Owner’s Age In a Cash Balance Plan a single owner could contribute up to: And the tax savings* would be: 30-34 $43,000 $18,920 35-39 $56,000 $24,640 40-44 45-49 50-54 55-59 60-65 *Tax savings based on an estimated 44% tax bracket. Amounts above are intended to be illustrative. Each plan differs Please feel free to email/call our office to discuss how a Cash Balance Plan can work for your clients. We look forward to speaking with you.
Posted by admin @ 8:06 am
$73,000
$32,120
$96,000
$42,240
$125,000
$55,000
$164,000
$72,160
$209,000
$91,960
based on the demographics of the plan sponsor.
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The Staff of CPD joins together for Breast Cancer Awareness Month On October 7, 2011, the staff of CPD will participate in Lee National Denim Day.® Employees will each make a $5.00 contribution to the fight against breast cancer in order to wear their jeans to work on Denim Day. Every year, Susan Vollmer of CPD participates in the Making Strides Against Breast Cancer Walk at Jones Beach in memory of her sister, Joanne Piccinnini who passed away from breast cancer at the age of 31. Susan and her mother were the first to participate; now, a few years later, Susan and her mother are joined by many friends and family to raise money for Breast Cancer research and to honor the memory of Joanne. This year, on October 16, 2011 CPD will join Susan and her team by matching the donations. http://main.acsevents.org/goto/susanvollmerpage For more information about National Breast Cancer Awareness Month, visit http://en.wikipedia.org/wiki/National_Breast_Cancer_Awareness_Month. ®Registered to Lee
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We commend Team Leaders Valentino Griffiths, Setona Armstrong and Almasi Howard for their efforts each year by promoting the philosophy behind Lee National Denim Day: “one day, one cause, one cure.”® To join our team or organize a team of your own, visit: http://www.denimday.com/team_page.aspx?tid=234386
If you wish to make a donation to Susan’s team, click on the link below, then click “donate on my behalf”.
National Denim Day.
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Lessons From Mother Nature We hope you have recovered from the earthquake and Hurricane Irene. What a week huh? Many faired far worse than we did and our thoughts are with them. Unlike earthquakes, hurricanes (and retirement) don’t come on suddenly. We hear about them as they creep slowly towards us over a number of days (or years in the case of retirement). Generally the hurricane will die out sooner than expected; in some cases, the real impact is felt after the fact. In the case of retirement, the impact is inescapable. In theory, the time “before the storm” should give us an opportunity to prepare. However, in retrospect, it seems that despite the mandatory evacuations and warnings, we now look back and wonder why people didn’t do more. It is important to remember that there is more to retirement planning than investments. The underlying framework supporting those investments (think plan design) is equally important. Consider that dream home you’ve always thought of building. Although there are countless exterior and finishing options without an architectural plan and sturdy support beams, that dream might not survive a storm. Corporate downsizing aside, retirement is not an unplanned event. Most people have plenty of time to do something about it, but only if they choose to do so before their own retirement hurricane makes landfall.
Posted by admin @ 12:10 pm
From experience and observation, I see that many retirees look back at their working lives that way. “Hey! I’m at retirement age and I forgot to plan!” They may remember their financial advisors droning on about time value of money, starting sooner, saving more, and so on and wonder why they didn’t act sooner.
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HOW DO WE PROTECT AMERICAN JOBS IN THIS DAY AND AGE OF OUTSOURCING? In an effort to level the playing field, I submit the following proposal. First, let me start with a few definitions to simplify this concept. Prevailing wages is a term used in a legislative effort to provide organized labor with a fair chance to bid for government contracts. Federal (and most) State laws require all employers engaged in the performance of federal (or state) contracts to pay a “prevailing wage” to their workers. This is to ensure that non-union employers cannot gain an unfair bidding advantage by paying wages far below the union rate and passing the savings on to the government in the form of lower bids. A prevailing wage is a rate of pay determined by the US (or State) Departments of Labor based upon the particular geographic area for a given class of labor and type of project. Acts such as Davis-Bacon, McNamara-O’Hara Service Contract and Walsh-Healy are the primary laws governing federally funded construction projects in the private sector. The Davis-Bacon Act requires contractors and sub-contractors working on federal and/or federally assisted contracts in excess of $2,000 to pay their laborers and mechanics not less than the prevailing wage rates and fringe benefits (as determined by the Secretary of Labor). OK. Have you got all that? Stay with me; it will become clearer. My idea is to take this “prevailing wage” concept and apply it to outsourced jobs in the form of an additional payroll tax. If an employer wants to outsource a position to say, India, fine. That outsourcing employer will pay a tax equal to the difference between the wages PAID TO THE ACTUAL EMPLOYEE performing the task in some far off land that said employee would receive here in the United States. This “leveling of the playing field” would not only protect American jobs but also provide tax revenue on those wages spent abroad. Just a thought.
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How to check out a pension pro It’s your name on the bottom line, so make sure you find someone who is ethical and competent. You’ve decided to hire someone to handle your retirement plan insofar as compliance and reporting. . You’ve looked at your options and decided which kind of paid professional fits your needs. Now the next step: Thoroughly vetting the professional. Remember, regardless of who fills out your 5500 and sends it on to the IRS, when you sign your tax return, you are legally responsible for everything on it. So it’s crucial to hire a pro who’s not only knowledgeable, but also ethical. Most tax preparers are honest and provide quality service. But as with any consumer transaction, it’s up to you, the buyer of the services, to make sure you’re hiring a true professional. Here are some things to keep in mind when someone else prepares your return. Check on IRS registration This was going to be the rule this year, but too many fir ms that have NO accreditation and in some cases no employees with a single pension credential, raised such a stink, the government backed off. Having said that, do you really want someone with no depth of training and knowledge messing with your retirement? Make sure the person you hire is credentialed, and that doesn’t mean some sales recognition. (CLU, ChFC, …….) Complaints count Look into whether the preparer has any questionable history with the Better Business Bureau. Also check your state’s board of accountancy for CPAs, your state’s bar association for attorneys or the IRS Office of Professional Responsibility for Enrolled Agents, Enrolled Do they belong? Check your advisors professional affiliations. Membership in such groups requires that a preparer follow a code of ethics and participate in continuing education programs. Office hours are important Make sure your professional will be around after the July filing deadline. Some offices ramp up just during filing season and then disappear as soon as returns are filed. Many aren’t really there at all as some major players in the field, outsource this work to foreign Who does the actual work? If your tax preparer is part of larger firm, Also find out if your preparer exports returns for preparation. Foreign countries do not have the same security and privacy laws as the United States, nor is there any recourse should your information be compromised as a result of lax or nonexistent privacy procedures. How do they charge? Don’t hire a firm whose fee is based on asset size of the plan. The work is the work. It is just as involved to provide services to a plan with $200,000 as it is if the plan has $500,000. That’s usually an indication that they are more involved in “asset gathering” that in providing proper oversight to your plan. In this environment, the preparer simply gets paid way more that the administration is worth; you just don’t see it. Find someone who wants to know Be wary of consultants who aren’t concerned about documentation. Reputable Avoid blank return requests Remember that warning about being responsible for the return you sign? If a tax preparer asks you to sign a blank tax return, find a new tax pro. Never sign a tax document before it’s finished and then only after you’ve read it carefully and understand the entries. If you’re unsure about an entry and your professional can’t explain it to your satisfaction, then don’t sign the return. A preparer who won’t or can’t explain the items on your 5500s and associated schedules is either incompetent or unscrupulous. Sure, thoroughly checking out your pension professional takes some time. But it’s
Posted by admin @ 8:07 pm
Actuaries and Enrolled Retirement Plan Agents. In addition look at the American Society of Pension Professionals and Actuaries (ASPPA) and the National Institute of Pension Administrators (NIPA).
entities. But the IRS can come asking questions about a return months later. The person who helped you file it should be around so you can get the answers to any possible IRS questions.
determine whether he or she will be the person actually doing your tax work or
whether your plan will be delegated to someone else in the office, perhaps a
person with less training.
advisors will request to see your prior history and will ask you detailed questions to determine your qualifications for prior deductions, credits and the like. It’s always
better that these questions are asked by your preparer and answered before filing,
rather than later by an IRS examiner.
time well spent when it ensures that your retirement plan is truly in compliance.
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Free administration for your retirement plan? New Department of Labor regulations regarding fee disclosure http://www.benefitspro.com/2011/05/05/401k-fee-disclosures-what-they-mean-and-whats-at-s
Posted by admin @ 8:56 pm
to plan sponsors and participants are almost finalized. For those of you who
think your retirement plan administration is “free”, think again. The
attached article explains what to expect in the near future regarding fee
disclosure. Feel free to call Creative Plan Designs, Ltd. with your
questions concerning this or your other retirement concerns.
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Why should you restate your document?
Posted by admin @ 5:21 pm
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Retirement, are you ready? In 2010, the U.S. Department of Health and Human
Posted by admin @ 5:15 pm
Services projected the average life expectancy to be 77. A general standard for
retirement income is about 70% to 80% of an individual’s current income in
order to maintain his/her standard of living. This does not account for
inflation through the years. With the feared shortfall in the Social Security
System, will you be prepared for your retirement if you retire at age 65? If
this thought scares you, it is understandable. However, with proper retirement
planning, your fears don’t have to keep you up at night. Creative Plan Designs,
Ltd. can help you with your retirement concerns. Give us a call for a
retirement consultation. You are under no obligation and will, at the very
least, walk away with knowledge about your future that may give you that good
night’s sleep after all.
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Understanding Retirement Plan Fees and Expenses As a plan sponsor, you may not fully understand the fees associated with maintaining your retirement plan. Feel free to contact CPD with your questions about the costs and tax benefits to owning a retirement plan. You can also go to the Department of Labor’s website for a wealth of pertinent information. For specifics from the DOL about plan fees and expenses, go to:
Posted by admin @ 10:25 am
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Considering starting a retirement plan? If you or another business owner you know are considering starting a retirement plan, please call us. We will be more than happy to answer your questions! Or…you can check out this FREE webinar presented by the Internal Revenue Service (IRS) on April 7, 2011. For more information and to register, go to:
Posted by admin @ 2:08 pm
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