Managed Financial Services Corporation, Inc. has established a track record of being a prudent and sound management company that provides comprehensive management services to their clients in the following areas.
Employee Retirement Income Security Act (ERISA) PLANS
- A 401(k) plan can help lay the groundwork for a comfortable retirement. By making pre-tax contributions, employees have an opportunity to reduce their current taxable income while saving for retirement. Some companies provide a matching contribution as an extra incentive for the employees to contribute. In-service distributions for certain hardships can be allowed, as well as first time home buyers.
- Participant deferrals do not count toward the deductible limits. Matching contributions may be subjected to a vesting schedule. Both pre-tax and matching contributions are subject to discrimination testing.
- A profit-sharing plan is popular because contributions are discretionary and are tied to profits. Up to 25% of covered pay can be contributed each year. In-service distributions can be made available after five years of participation or when the participant reaches age 59-1/2.
UNI-K Plan Profit Sharing Plan
- This 401(k) plan is designed for owner-only businesses. It allows for much larger tax-deductible contributions than other retirement plan options. The Uni-K plan is for any business that employs only owners and their spouses, including C corporations, S corporations, partnerships and sole proprietors. This plan is not suitable for businesses with employees, or those that may be contemplating expansion in the near future.
Age-Based Profit Sharing Plan
- This plan provides flexibility in employer contributions, but is based on a formula using age and salary. Because age is a factor, this plan favors older employees who have fewer years than younger employees to accumulate sufficient funds for retirement.
Money Purchase Plan
- A money purchase plan is a pension plan that has a mandatory annual contribution. Company contributions can be as high as 25% of covered pay. The contribution formula is set by the plan terms. Contributions can be subjected to a vesting schedule. In-service distributions are generally not available.
Defined Benefit Pension Plan
- The Defined Benefit Pension Plan requires a business to contribute enough each year to fund a specific future benefit. This plan provides the most benefits to older employees who need to accumulate assets rapidly.
Savings Incentive Match Plans for Employees (SIMPLE) IRAs
- A SIMPLE IRA is a retirement plan for small businesses. Eligible employees may make elective-deferral contributions to their SIMPLE IRAs and the employer may elect to make either matching or non-elective contributions. Employer contributions are mandatory for each year that the SIMPLE IRA plan is maintained. To sponsor a SIMPLE, a business cannot have more than 100 eligible employees during the preceding calendar year.
- Elective-Deferral Contribution
This is a contribution arrangement of an employer-sponsored retirement plan under which participants can choose to set aside part of their pre-tax compensation as a contribution to the plan
- Matching Contribution
This is a type of contribution an employer chooses to make to his or her employee’s employer-sponsored retirement plan. The contribution is based on elective deferral contributions made by the employee
- Non-Elective Contributions
This a type of contribution A type of contribution an employer chooses to make to each of his or her eligible employee’s employer-sponsored retirement plan. The contribution is not based on salary reduction contributions made by the employee.
- Elective-Deferral Contribution
Simplified Employee Pension Plan (SEP)
- A Simplified Employee Pension (SEP) plan is a flexible, cost-effective retirement plan that allows self-employed individuals and small business owners to make discretionary, tax-deductible contributions to Traditional IRAs for all eligible employees.
- Also known as a Tax-Sheltered Account (TSA), a 403(b) plan is for employees of public schools, nonprofit hospitals and other tax-exempt organizations. Several contribution limits apply to a 403(b) plan. A plan that includes both employer contributions and employee elective deferrals is subject to both the elective deferral limit, and the limit on annual additions. For 2011 and 2012, the total of employer and employee contributions (including the 15-year catch-up discussed below) cannot exceed the lesser of $49,000 for 2011 and $50,000 for 2012 or 100% of includible compensation, plus any age 50 catch-up contributions.
The Optional Retirement Plan (ORP) is specially authorized by the State of Texas under IRS Regulation 403(b). It is designed to provide eligible employees of state-affiliated universities and colleges with a high-quality, portable retirement program. A percentage of the employee’s salary is withheld each month and then invested into the ORP account.
- This is the most popular type of account for individuals 18 or older.
- This type of account gives two or more people equal ownership of the account. Upon death the account allows either the surviving joint owner, or designated beneficiaries of the deceased owner, to receive the account instead of passing it into the estate.
- This type of account is registered in the name of a trust or trustee, using the trust’s tax ID number.
- This type is for Company accounts for cash management or longer-term assets.
Individual Retirement Accounts (IRAs)
- A Traditional IRA is a tax-deferred retirement savings account. You pay taxes on your money only when you make withdrawals in retirement. Deferring taxes means all of your dividends, interest payments and capital gains can compound each year without being hindered by taxes – allowing an IRA to grow much faster than a taxable account.
- Traditional IRA contribution limits are subject to annual cost of living adjustments as set forth in the Pension Protection Act of 2006. The following conditions apply:
- o If you are under 50 years of age at the end of 2012: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2012. This limit can be split between a traditional and a Roth IRA but the combined limit is $5,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified adjusted gross income (modified AGI).
- o If you are 50 years of age or older before the end of 2012: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2012. This limit can be split between a traditional and a Roth IRA but the combined limit is $6,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified AGI.
- This type of IRA is similar to a traditional IRA, but is used to receive funds “rolled over” from employer-sponsored accounts, such as a 401(k), when the employee terminates employment with that employer.
- A Roth IRA is an individual account provides for the investor who is looking for tax-free growth potential. Once you reach age 59½, you may qualify for tax-free withdrawals of both Roth IRA contributions and any accumulated earnings. In addition, the Roth IRA owner is never required to take distributions, making a Roth IRA an effective option for both estate and retirement planning purposes.
- Tax Advantages
- Tax-free growth potential.
- You pay no taxes when you make qualified withdrawals after age 59½ and your account has been open at least five years.
- No age restrictions, but you must have earned income in order to make Roth IRA contributions.
- For Tax Year 2011: May not be eligible if your income is over $122,000 for single filers and $179,000 for joint filers.
- For Tax Year 2012: May not be eligible if your income is over $125,000 for single filers and $183,000 for joint filers.