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Retirement Planning ((((Any individual, regardless of age, who has self…
Retirement Planning 
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An employer may contribute 25% of the eligible employees compensation, only if the contribution does not exceed $54,000
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Distributions before the age of 59.5 are charged with a 10% early distribution penalty. There are some exceptions to the 10% early distribution penalty some include;
To pay medical insurance, For a disability, qualified higher education expenses, purchase of a first home, etc.
An IRA owner must begin required minimum distributions by 70.5 if not there will be a 50% excess accumulation penalty on the amounts not distributed.
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A SEP plan is a retirement plan established by employers, including self employed individuals, partnerships, and sole proprietors
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For a 401(k) the deferral limit is $51,000 and the maximum combined employee and employer contribution that can be made to an employee's account is $255,000
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An employee is permitted to take distributions from age 59.5 and higher. Once the employee reaches 70.5, they must start to take a Required Minimum Distribution (RMD)
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There are penalties that will occur if a distribution occurs before age 59.5 or if no distributions were made after age 70.5.
Penalties if taken before are having to pay 10% of the distribution and after it is a 50% excess accumulation fee.
Some exceptions to the distribution rule is that if the purpose of it was for medical reasons, the employee separates from service, or if is terminated and is replaced with another plan.
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A Defined Contribution Plan is when a certain amount or percentage of money is set aside each year for the benefit of each employee
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The money put into the account, is taken out of their paycheck before it is taxed.
A 401k plan is a retirement account that is established by the employer, for the benefit of the employee.
One strategy used is matching and vesting which is when the employer matches and puts money into the account and is in your ownership, vested, after a number of years.
To participate in a qualified plan, one must be 21 years old and have worked for a year.
Any business, including sole proprietorship's, partnerships, corporations and government entities may adopt one.
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The owner can put contributions in any type of investment besides real estate for one's own use, antiques, life insurance, and most coins.
Each year one is allowed to contribute $5,500 but if they are older than 50, they can contribute $6,500
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The income limit is $194,000 if they are married jointly.
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One can make a contribution with their own account, their spouse's account, and can use transfers and rollover contributions.
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To make a contribution, the individual must have a modified adjusted gross income (MAGI) that is less than a certain amount.
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This only applies on non-qualified distributions but if it is qualified, it is tax and penalty free.
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Any individual, regardless of age, who has taxable compensation for the year, and will not reach age 701/2 by the end of the year may start a traditional IRA
Any individual, regardless of age, who has self employment for the year and will not reach age 701/2 by the end of the yea may start a traditional IRA
Traditional IRAs must be established with an institution that has received IRS approval to offer IRAs
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A rollover is similar to a transfer in how it's a movement of assets between similar types of retirement accounts but the transaction is reportable
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The maximum yearly contributions limit for the most recent year is $5,500, but it's $6,500 if 50 or older
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Distributions before the age of 59.5 are charged with a 10% early distribution penalty. There are some exceptions to the 10% early distribution penalty some include;
To pay medical insurance, For a disability, qualified higher education expenses, purchase of a first home, etc.
An IRA owner must begin required minimum distributions by 70.5 if not there will be a 50% excess accumulation penalty on the amounts not distributed.
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