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Profit Sharing 401k
A profit sharing/401(k) plan allows a business owner and his/her employees to save substantial dollars for their retirement. The maximum 401k contribution for 2007 for an individual under the age of 50 will be $15,000 and $20,500 for an individual over the age of 50.
- Contributions are deductible from both state and federal taxes.
- The money accumulates on a tax-deferred basis and is taxed as regular income at retirement.
- There are numerous funds to choose from, and choices vary from plan to plan.
- Loans up to 50% of one's account, to a maximum of $50,000, are allowed.
- Hardship withdrawals are allowed, but are subject to a 10% penalty tax prior to age 59.5, and are added to an individual's taxable income.
- Employer profit sharing contributions of up to 25% of covered payroll (matching or discretionary) are allowed, but are not required.
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...allows a business owner and his / her employees to save substantial dollars for their retirement... |
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Dixon Associates serves companies in Eastern Massachusetts. These products can vary substantially from state to state. These descriptions are based on Massachusetts legislation.
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