Retirement Plans - Wealth Management
Defined Contribution Plans

A Discretionary Approach

This type of planning enables both the employer and the employee to contribute to one's retirement. These types of plans are all voluntary, and it is not mandatory that either party contribute. Whatever the individual's account balance is at the time of their retirement is their retirement amount.

Features of the 401(k) Plan:

• Employees can elect to defer a percentage of their salary into the plan.
• Salary deferrals by employee are in pre-tax dollars.

Benefits of the 401(k) Plan:

• Employer contributions are discretionary (not required).
• Employers can elect to make matching contributions.

Features of Profit Sharing Plans Features:

• Contributions are not required to be made every year (at the discretion of the employer).
• Contributions are generally allocated to participants based upon compensation.
• Maximum contribution is the lesser of 15% of compensation or $22,500 per employee.
• Contributions can be discretionary based on the employer’s preference.

Benefits of Profit Sharing Plan:

• Current tax deductions for contributions made to the plan.
• Contributions may be made out of current profits, regardless of whether the employer actually has profits.
• No commitment to fixed contribution formula.
• It provides identifiable incentives to employees to increase company profitability.

Features of Money Purchase Plans Features:

• Specific percentage of compensation is contributed for each employee.
• The maximum contribution is the lesser of 25% of compensation or $30,000 per employee.
• Contributions are not dependent upon profits.

Benefits of Money Purchase Plans:

• Consistent contribution formula is used.
• Employees receive contribution regardless of profitability.

To learn more, call a Wealth Management Advisor at 402.633.3400, or toll-free at 1.800.538.7298, Monday through Friday, 8:00 a.m. to 5:00 p.m. CT.