It’s your company, after all, so you deserve the lion’s share of the retirement plan benefits. But it doesn’t always work out that way. Stringent anti-discrimination rules limit the amounts you can salt away in your own account even if you had to skimp in earlier years while you were building up the business.
Strategy: Add an age-weighted component to a profit-sharing plan. This feature enables the company to provide bigger benefits for employees based on age.
As with another qualified plan alternative—the comparability plan—an age-weighted profit-sharing plan enables a small business owner to keep more retirement benefits for himself or herself.
Here’s the whole story: The same basic rules that apply to regular profit-sharing plans generally also apply to plans using the age-weighted feature. The age-weighted plan uses a discretionary formula that provides more flexibility than most other types of qualified plans. For insta...(register to read more)