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Retirement pensions are becoming
rare. Life expectancies are climbing. The need for retirement
savings has never been greater. Today, the impact of a company
sponsored 401k or 403b plan for your employees is immeasurable.
We offer an excellent plan with custom plan design, professional ERISA
and compliance guidance, comprehensive employee communications, education
materials, and full-service record keeping and administration.
The 401(k)
One of the best ways to save for retirement is contributing pre-tax dollars
into a company sponsored 401k.
A 401k Overview
• A 401(k) offers tax
advantages. Your money has the potential to grow faster in a 401(k)
than in traditional, after tax savings.
• The money you put
into your 401(k) comes out of your paycheck before state and federal
income taxes are calculated. So, you can invest more in a 401(k) than
in an after-tax IRA account.
• You don’t pay
taxes now on the earnings in your 401(k). Instead, you pay them when
you take the money out. So your money has the potential to compound
and grow faster than it would in after-tax savings.
• A 401(k) plan offers a variety of ways to invest – from
conservative investments to aggressive equity (stock) funds. This way,
you select the level of estimated risk and potential return of your
savings.
• Your contributions
are automatically taken out of your paycheck before you receive it.
So it’s an easy and convenient way to get into the habit of saving.
• Some employers match
employee contributions. This means they’ll put in additional money
for every dollar saved, up to a certain amount.
• Depending on your
plan, you may be able to take hardship distributions from your 401(k)
savings to help pay for a new first time home purchase, educational
expenses or financial emergencies. Some plans also allow loans.
• If you leave your
current employer you can take the money you contributed to your 401(k)
savings plan with you. Employer matching contributions become portable
when they are vested.
The 403(b)
Under a 403(b) tax-deferred
retirement program, you can make pre-tax contributions to a tax-sheltered
annuity contract or custodial account through a salary reduction agreement,
which means that your contributions are deducted from your salary before
federal income taxes are calculated.
• You decide, within
certain legal limits, how much of your income you want to save and invest.
• Your employer will
reduce your paycheck by that amount before federal income taxes are
taken out and forward it to ING on a regular basis.
• Contributions are
invested in your choice of any combination of investment options offered.
• Contributions and
any earnings that accumulate over the years generally are not taxed
until you receive them, which is usually at retirement when you may
be in a lower tax bracket.
• Your 403(b) tax-deferred
retirement program has no effect on Social Security. Your Social Security
contributions and benefits will be based on your total pay, including
the amounts paid into your 403(b) tax-deferred retirement program.
• Beginning in 2002,
middle and lower income savers may be eligible for a nonrefundable tax
credit of up to $1,000 for elective contributions to their governmental
457,403(b) or 401(k) plan. The availability and amount of the tax credit
depends on your adjusted gross income and your filing status. If your
adjusted gross income is no more than $50,000 (married, filing jointly),
$37,500 (head of household) or $25,000 (all other filers) and make elective
contributions, you may be eligible for this valuable tax credit.
Insuraty offers 403b plans through
our preferred provider, ING Retirement, one of the leaders in the 403b
market.
Annuities
There exists a variety of annuity
options for your employees, ranging from annuities that allow the opportunity
to participate in stock market growth, cash bonuses, or both. These annuities
offer the safety and guarantee of a fixed interest, which is particularly
comforting for today’s investors.
The following are terms used
when purchasing or owning annuities:
Annuitant
The person upon whose life the annuity payments are based.
Annuity
A long term, tax-deferred insurance contract typically used to provide
a stream of income over a period of time.
Annuitization Value
The value of your policy, including premiums received, bonuses and interest
credited. This value is available when taken as a stream of income over
a period of time.
Bonus
The bonus as described in your policy. The bonus is an additional value
immediately credited to the annuitization or accumulation value when premiums
are received.
Cash Value
An annuity is designed to be paid out over a period of time. The cash
value is the value that will be paid to you in the event that you surrender
your policy and take the benefits in a single payment.
Current Interest Rate
This is the interest rate credited towards your annuitization value. After
the first year the rate may vary but it will never be less than the contractual
guarantee. Interest earned is tax-deferred.
First Year Guaranteed
Yield
This is calculated on the premium bonus and guaranteed first-year interest.
This yield is reflected in the annuitization and accumulation values.
Partial Surrenders/Withdrawals
Funds you have taken out of your policy where charges may have been incurred.
Policy Owner
The person or party who owns the annuity policy.
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