Retirement Plans for Small Business and Corporation:

·   401(K) plan is available to all type of businesses. Under 401k plan, there is no requirement for employer contribution, but some or all employees’ contribution may be matched. There are multiple matching contribution formulas to choose.

 

·   SIMPLE IRA plan is available to businesses with 100 or fewer employees (earning at least $5,000/year) and who do not maintain another retirement plan. Employee’s deferral is through salary reduction agreement. Employer must contribute to the SIMPLE IRA’s for each eligible employee under one of two IRS prescribed formulas.

 

·   SEP IRA (Simplified Employer Pension) plan is for small business owners and self-employed individuals who want a plan that is relatively easy to set up and administrate. Employer makes contributions to employee’s IRA’s. Employer determines annual deductible contribution that applies to all eligible employees. Amount can vary each year from 0% to 25% of compensation up to IRS maximum contribution limit for that year.

 

 Retirement Plans for Individuals:

·   Traditional IRA:

·   Contributions are tax-deductible

·   Assets grow tax-deferred until withdrawn

·   Withdrawals of earnings can be made at age 59-1/2

·   Or, if younger than 59-1/2 for a first-home purchase (up to $10,000)

·   Or, in case of death or disability

·   Roth IRA:

·   Contributions are not tax-deductible, but money can accumulate tax-Free

·   Assets grow tax-deferred until withdrawn

·   Tax-free and penalty-free withdrawals of annual contributions can be made at any time

·   Tax-free and penalty-free withdrawals of earnings can be made after five years

·   Or, at age 59-1/2

·   If younger than 59-1/2 for a first-home purchase (up to $10,000)

·   Or, in case of death or disability

·   There is no requirement to begin taking distributions at 70-1/2

·   You can even continue making contributions after 70-1/2 if you're still working

·   Rollover IRA:

A Rollover IRA is a type of Individual Retirement Account designed for people who have changed jobs or retired and have assets accumulated in their employer-sponsored retirement plan. Eligible distributions from such plans can be rolled over directly into an IRA account without incurring any tax penalties and assets remain invested tax-deferred.

 

ANNUITIES:

Annuity is a contract sold by insurance company that pays monthly income for the life of the annuitant or for the lives of two persons in a specified period of time.

There are variations in both the way that payments are made by a buyer during the “Accumulation Period” and the way payments are made to the annuitant during the “Liquidation Period”.  An important benefit of annuity is “Tax-Deferred” growth which means you do not pay taxes on your earnings until you withdraw your money.  If individual dies before income payments begin, annuity provides a “Death Benefit” that guarantees the beneficiaries will never receive less than the amount contributed to the contract, less any withdrawals or fees. Types of Annuity are:

·   Immediate-Annuity provides regular income payments right away after a single premium is paid.

·   Deferred-Annuity is bought by means of installments, with benefits scheduled to begin at a specific age such as 65 or a later date.  Withdrawals made before age 591/2 are generally subject to 10% tax penalty and ordinary income tax.

For additional information please click here.

 

 Long-Term-Care Insurance:

Many Americans believe their health insurance or government programs will pay for their Long-Term-Care, but that usually isn’t the case.  Medicare may cover Skilled-Care in a Nursing-Home for the first 100 days, if admission follows a three-day hospital stay.  A significant portion of Long-Term-Care cost is paid out-of-packet by individuals and their families.


Five questions you need to ask yourself when purchasing a Long-Term-Care Insurance:
1) where would you like to receive care?
2) how would you like to receive your benefits?
3) how much coverage is right for you?
4) how long would you like your benefits to last?
5) how long can you wait before benefits are paid?


Coverage options usually offer a flexibility regarding where and by whom the care is provided. In addition to Home-Care all levels of care in any licensed facility can be provided including a Nursing-Home, Assistance-Living-Facility, Hospice-Care center, Adult-Day-Care center and others. The level of coverage should be selected at the time insurance is purchased.

 

Benefit Level allows choosing a monthly benefit between $1,000 and $6,000 in $100 increments. Usually Home-Care benefit level is between 50 to 100% of the Nursing-Home benefit level. In addition, coverage duration, such as two to six years or Life-Time can have effect on the amount of benefit level too. The cost of having care at Nursing-Home can range between $40,000-80,000 a year, and at home around $30,000 a year.

For additional information please click here.