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Exclusive Insurance and Benefit Plans for Business and Education |
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Financial Planning
Estate Planning and Wealth Accumulation | Online Insurance Profit Sharing Plans
A profit sharing plan is a retirement plan that provides for an individual account for each participant. The employer who sponsors the plan deposits annual contributions into the plan and the plan administrator credits investment income, expenses, gains and losses, and any partial forfeitures to each participant's account on an annual basis. Amounts contributed to the plan are invested and accumulate tax deferred for eventual distribution to participants or their beneficiaries either at retirement, or at the occurrence of some specified event ( e.g. death, disability or termination of employment). The maximum contribution that can be made for a participant is 25% of their compensation, up to a dollar maximum of $30,000 annually.
Contributions to the plan by the employer can be on a discretionary basis and can be allocated to participants in a number of different ways. In a good year a business can contribute and deduct up to 15% of all participants compensation. In an off year the business may elect not to contribute anything.
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