As a business owner, the decisions you make about your company’s retirement plan will have far-reaching effects. With the help of The Harvard State Bank you can secure your own retirement future and provide retirement security for your employees. The most popular and flexible retirement plan available is the Profit Sharing Plan.
Profit Sharing Plans build an employee retirement fund-generally based on profits of the business. They offer two options:
Regular Plan: The employer decides each year if a contribution will be made and how much it should be. Each participant then receives a contribution based on a percentage of his/her income earned from the business.
401(K) Plan: In addition to discretionary contributions by the company, each eligible employee can voluntarily contribute a portion of his/her wages to the plan. These amounts are excluded from the employee’s gross income, reducing that year’s federal income taxes.
These plans offer generous tax benefits. Contributions are tax deductible; and contributions, income, and capital gains are tax-deferred while invested in the plan.
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