Polizzi Insurance, Rochester, New York


Small Business Survey
If you own a small business, what type of retirement plan do you have?

Traditional IRA
SEP-IRA
Simple IRA
One-Person 401(k)
Profit Sharing
Money Purchase
Age-Weighted
Defined Benefit
SafeHarbor/DASH 401(k)
None






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Types & Uses of Retirement Plans*

  • Simplified Employee Pension (SEP) Plan

            For self-employed people and small business owners (sole proprietors, partnerships and corporations) who wish to make tax-deductible contributions of up to 25% of income (20% if self-employed) and that of their eligible employees, up to a maximum of $40,000 per year.

  • Simple IRA Plan

            For firms of 100 or fewer employees to establish an employee savings program.  Employees can make tax-deductible contributions of up to $7,000 per year ($7,500 if age 50 or older).  The employer is required to match employee contributions up to 3% of pay or contribute 2% of pay for all eligible employees, regardless of whether the employee makes a contribution.  This plan has the advantage of being less costly to administer than a 401(k) plan.  Contribution limits increase for tax years 2002 through 2009 due to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 in accordance with the chart below.




  • Profit Sharing Plan**

            For businesses (sole proprietors, partnerships or corporations) who wish to make discretionary tax-deductible contributions of up to 25% of pay (20% if self-employed), up to a maximum of $40,000 per year.  This plan permits vesting and loan schedules not available with a SEP.

  • Money Purchase Pension Plan**

            For businesses (sole proprietors, partnerships or corporations) with predictable incomes who wish to make mandatory pre-determined tax-deductible contributions each year.  Contributions are limited to 25% of pay (20% if self-employed), up to a maximum of $40,000 per year.  This plan permits vesting and loan schedules not available with a SEP.

  • Age-Weighted or Comparability Plan

            For business owners who are older and more highly paid than most of their employees and wish to allocate contributions under a formula based on both age and salary.  Contributions are limited to 25% of payroll, up to a maximum of $40,000 per year. 
  • Defined Benefit Pension Plan

            For business owners who wish to contribute enough money each year to provide a specific benefit upon retirement.  This may be beneficial to older employees with a high, stable income who need a rapid accumulation of assets over a short period of time.

  • "One-Person" 401(k) Plan

            For any business that employs only owners and their spouses including sole proprietors, partnerships and sole corporations.  This plan is NOT suitable for businesses with employees.  The one-person 401(k) is designed specifically for small business owners who want the higher contribution limits of a 401(k) without the administrative expenses and complexity of a traditional 401(k).  This plan permits salary deferrals of up to $11,000 per year ($12,000 if age 50 or older).  Employer contributions are limited to 25% of pay (20% if self-employed), with a maximum combined deferral and employer match of 100% of pay up to $40,000 per year ($41,000 if age 50 or older).

  • 401(k) Plan

            For employers who wish to allow employees to make pre-tax contributions through payroll deductions of up to $11,000 per year ($12,000 if age 50 or older) or 100% of their pay, whichever is less.  No employer contributions are required.  Employer can make discretionary matching contributions or profit sharing contribtuions, with a maximum combined deferral and employer match of 100% of pay up to $40,000 per year ($41,000 if age 50 or older).  Contribution limits increase for tax years 2002 through 2009 due to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 in accordance with the chart below.

  • Safe Harbor or DASH 401(k) Plan

            For business owners who wish to give their employees the advantages of a 401(k) plan, while maximizing the amount they can put away for themselves.  Contribution limits are the same as for a 401(k) Plan.  Contribution limits increase for tax years 2002 through 2009 due to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 in accordance with the chart below.




  • 403(b) Plan

            For employees of public schools, non-profit hospitals and other certain tax-exempt organizations.  Also known as a Tax-Sheltered Account.  Employees can make discretionary pre-tax contributions of up to $11,000 per year of their pay ($12,000 if age 50 or older).  Contribution limits increase for tax years 2002 through 2009 due to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 in accordance with the chart above.



*    Stephen M. Polizzi Insurance Agency, Hazard & Siegel Inc. and their agents do not provide legal or tax advice.  For specific legal or tax advice concerning your situation, please consult your attorney or tax advisor.

**  The term "Keogh" or "HR-10" describes any type of retirement plan established by an unincorporated business - whether it be a profit sharing, money purchase or defined benefit plan.



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Retirement Plans, Rochester, New York

Products and agency services may not be available in all states.  Stephen M. Polizzi is licensed for life, health and variable annuity products in the states of New York and Florida.  Securities offered by Stephen M. Polizzi as a Registered Representative through Hazard & Siegel Inc., 5790 Widewaters Parkway, P.O. Box 157, DeWitt, New York 13214, (315) 414-0722, Member FINRA / SIPC.  Hazard & Siegel Inc. and Stephen M. Polizzi Insurance Agency are separate and non-affiliated entities.

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