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Executive Pension Plan that you should start early
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Posted On :
Jul-15-2011
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Article Word Count :
505
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The increasing concern of individuals working across the globe is the need for financial security. This need arises out of skyrocketing prices and the inflation being faced by most countries.
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The increasing concern of individuals working across the globe is the need for financial security. This need arises out of skyrocketing prices and the inflation being faced by most countries. Well while one is young one might still get another job or ask for a hike in salary but after retirement when there is no real source of income, the situation becomes a bit tense. The only way to survive after retirement is through Pension plans. Hence choosing a good pension plan not only matters a lot for one’s future but also has tax saving benefits. In the succeeding paragraphs I would explain certain plans available in market which can be ascribed to.
First is the Executive Pension Plan which works like the Executive Bonus Plan. In this plan through the employer has the option of selecting certain employees, those who he wishes to be a part of the plan. The employer will make some contributions towards the fulfilment of the plan and in turn each of the chosen, few employees will receive 1099 towards contribution. In the Executive Pension Plan the employer will also be receiving certain benefits since the contribution deducts tax for him.
Then comes the 412 e 3 Defined Benefit Plan in which the yearly contribution has to be calculated within the confines of the Internal Revenue Code section 412 (e) (3). For past 50 years these pension plans have guaranteed return after retirement and they are not subject to the conditions in the market.
The Internal Revenue Code which has now amended as 412 (e) (3) from 412 (i) is actually parented from 412 e3 defined benefit plan. 412i defined benefit plan provides guarantee for certain fixed annuities and provides a life insurance cover. A tax deduction is given for the contributions of the employer, which basically pays the premium on insurance contract of the employee. As rate of return’s totally guaranteed; hence provides immunity against any risks to the investment.
A Cash Balance Pension Plan has been defined as the benefit plan certified by the ERISA. It maximizes one’s tax savings while effectively leveraging one’s contributions for retirement. In this plan benefit forms a series monthly payments for a lifetime that start at time around one’s retirement. In Cash Balance Pension Plan benefit forms a very specific balance in one’s account.
There are several Pension Plans for Small Businesses present in the market and which can be availed in order to maximize benefits of the owners of small business. To name a few of such plans - the traditional pension plans, 410 (k) and profit sharing plan. All of these mentioned Pension Plans for Small Businesses are advantageous towards deduction and deferment of tax.
These are some of the pension plans that most companies offer. While choosing a pension plan one must be clear about one’s requirement in future and research well before choosing one plan still 412i defined benefit plan stands out.
For more info kindly visit: falcoconsulting.com
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Article Source :
http://www.articleseen.com/Article_Executive Pension Plan that you should start early_66779.aspx
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Author Resource :
Gary Lucas is an author of this article who writes about the importance of Cash Balance Pension Plan and 412 (e) (3) defined benefit plan. He has also written about the benefits of Executive Pension Plan, 412i defined benefit plan and Pension Plan for Small business.
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Keywords :
Cash Balance Pension Plan, Executive Pension Plan, Pension Plan for Small business, 412 e 3 defined benefit plan, 412i define,
Category :
Finance
:
Finance
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