Free to Retire
Who is responsible for your retirement security? If you correctly answered, “I am,” you are among the 81% of Americans who recognize this inescapable fact of modern life.1
But if you’re like many people, there are too many distractions and responsibilities that compete for the time required to develop a winning retirement strategy.
In such a situation, a variable annuity might provide a way to help you pursue your retirement goals.
Here Come the Pros
With a variable annuity contract, one or more payments are made to an insurance company, which agrees to pay the contract holder an income at a future date. The contract holder can direct the premium payments to be invested in a mix of underlying equity and fixed subaccounts that pursue investment gains.
Variable annuity subaccounts are run by professional money managers who pursue the subaccounts’ stated investment objectives. This leaves the contract holder free to focus on his or her own interests, rather than having to worry about the inevitable fluctuations of the financial markets.
A variable annuity is a long–term retirement savings vehicle. It isn’t subject to minimum withdrawal requirements in retirement, and it offers a wealth of payout options when you are ready to begin collecting retirement income.
Of course, variable annuities have contract limitations, fees, and charges. Subaccount values fluctuate with changes in market conditions. When the annuity is surrendered, the principal may be worth more or less than the original amount invested.
The earnings portion of annuity withdrawals is taxed as ordinary income. Distributions prior to age 59½ may be subject to a 10% federal income tax penalty. Surrender charges may also apply during the contract’s early years. Variable annuities are not guaranteed by the FDIC or any other government agency. They are not deposits of, nor are they guaranteed or endorsed by, any bank or savings association.
Variable annuities are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.
1) National Association for Variable Annuities, 2006
Fee-Based financial planning
11100 Wayzata Blvd, Suite 161
Minnetonka, MN
55305
Phone: (952) 277-4259
www.joeswanson.com
swanson.joe@principal.com
Friday, November 23, 2007
Friday, October 26, 2007
Helping Business Owners, Individuals and Executives with Fee-Based Planning Services
Contact an Advisor today
Elite Planning Program
Our Elite clients receive the objectivity and confidence that comes with a financial planning arrangement
Our financial plans use a holistic approach to analyze your current financial situation and evaluate how it aligns with you various goals. We provide you with concise written information to provide direction towards your future. At your request, we can review your plan periodically and monitor your progress to help keep you on track.
You will receive one-on-one guidance on everything from asset allocation to estate planning to achieving your financial independence.
What is the Financial Planning Process?
Financial planning involves a series of steps to help you accomplish your financial goals. As Princor Investment Adviser Representatives, we will gather information about your concerns and current financial situation in order to learn your specific goals and objectives. We then provide you with recommendations and alternative strategies for achieving those goals.
Once you’ve decided what recommendations to follow, we can help you implement those decisions if you so choose. The last step in the financial planning process is to periodically review and, if necessary, revise the plan.
Isn’t Financial Planning Just for the Wealthy?
Financial planning isn’t about “getting wealthy.” It’s about helping you achieve your specific life goals, whatever your level of affluence. Anyone who wants to take control of their financial life, make good financial decisions and achieve financial independence can benefit from a financial plan. Years ago, the financial life of the average family was relatively uncomplicated. People worked for the came company most of their lives, lived a few years in retirement on Social Security and their pension and passed their estate on to their children. However, increased longevity, changing demographics and a more complex, dynamic financial world have changed all that.
We have found that most everyone, regardless of financial status, appreciates financial planning help in areas such as:
Asset allocation
Retirement planning
Survivor and disability income needs
College education
Exit planning for business owners
Estate planning
Personal Service:
Your relationship is with us. As your primary contact, we are the one person to call for answers, ideas and guidance with respect to your financial plan. The full support of our team is available as well. We can also work with your other professional advisors to effectively help you handle your ever-changing needs.
The relationship between you and us is intended to be long-term. You may even find your heirs will benefit from this relationship, helping them carry on your legacy.
Access to Premier National Money Managers:
We have arrangements to offer the service of premier professional money managers for your investing needs. We have a number of asset allocation programs and separately managed accounts that allow you to invest without commissions. Your fees in these programs are based on the amount of assets under management in your account (based on a percentage of the asset value).
Compensation:
As with all true financial planning relationships, our compensation is based upon an hourly or flat fee to compensate us for the time, energy and expertise we provide.
Apart from financial planning services, we may also be compensated from your introductions to others you believe may benefit from this type of relationship.
Your Relationship with Us:
Elite clients work with an investment advisor representative of Princor Financial Services Corporation to receive financial planning services. Even though your financial plan contains suggestions for solutions to meet your financial goals, you are not required to transact business or purchase products with Princor to implement these suggestions. There is no obligation, either before of after receiving your plan.
Should you decide to purchase financial products, you will pay any applicable fees or commissions relating to the purchased products. Except in cases where Princor acts as investment adviser, Princor acts as a broker dealer in offering financial products to you.
MM3049-1
Contact an Advisor today
Elite Planning Program
Our Elite clients receive the objectivity and confidence that comes with a financial planning arrangement
Our financial plans use a holistic approach to analyze your current financial situation and evaluate how it aligns with you various goals. We provide you with concise written information to provide direction towards your future. At your request, we can review your plan periodically and monitor your progress to help keep you on track.
You will receive one-on-one guidance on everything from asset allocation to estate planning to achieving your financial independence.
What is the Financial Planning Process?
Financial planning involves a series of steps to help you accomplish your financial goals. As Princor Investment Adviser Representatives, we will gather information about your concerns and current financial situation in order to learn your specific goals and objectives. We then provide you with recommendations and alternative strategies for achieving those goals.
Once you’ve decided what recommendations to follow, we can help you implement those decisions if you so choose. The last step in the financial planning process is to periodically review and, if necessary, revise the plan.
Isn’t Financial Planning Just for the Wealthy?
Financial planning isn’t about “getting wealthy.” It’s about helping you achieve your specific life goals, whatever your level of affluence. Anyone who wants to take control of their financial life, make good financial decisions and achieve financial independence can benefit from a financial plan. Years ago, the financial life of the average family was relatively uncomplicated. People worked for the came company most of their lives, lived a few years in retirement on Social Security and their pension and passed their estate on to their children. However, increased longevity, changing demographics and a more complex, dynamic financial world have changed all that.
We have found that most everyone, regardless of financial status, appreciates financial planning help in areas such as:
Asset allocation
Retirement planning
Survivor and disability income needs
College education
Exit planning for business owners
Estate planning
Personal Service:
Your relationship is with us. As your primary contact, we are the one person to call for answers, ideas and guidance with respect to your financial plan. The full support of our team is available as well. We can also work with your other professional advisors to effectively help you handle your ever-changing needs.
The relationship between you and us is intended to be long-term. You may even find your heirs will benefit from this relationship, helping them carry on your legacy.
Access to Premier National Money Managers:
We have arrangements to offer the service of premier professional money managers for your investing needs. We have a number of asset allocation programs and separately managed accounts that allow you to invest without commissions. Your fees in these programs are based on the amount of assets under management in your account (based on a percentage of the asset value).
Compensation:
As with all true financial planning relationships, our compensation is based upon an hourly or flat fee to compensate us for the time, energy and expertise we provide.
Apart from financial planning services, we may also be compensated from your introductions to others you believe may benefit from this type of relationship.
Your Relationship with Us:
Elite clients work with an investment advisor representative of Princor Financial Services Corporation to receive financial planning services. Even though your financial plan contains suggestions for solutions to meet your financial goals, you are not required to transact business or purchase products with Princor to implement these suggestions. There is no obligation, either before of after receiving your plan.
Should you decide to purchase financial products, you will pay any applicable fees or commissions relating to the purchased products. Except in cases where Princor acts as investment adviser, Princor acts as a broker dealer in offering financial products to you.
MM3049-1
Friday, September 14, 2007
Change Health Insurance
The words Financial Planning and Financial Advisor make no claims.
Tolerating Risk
Nearly all mutual fund shareholders acknowledge that investing in equity or bond mutual funds involves some degree of risk. About half of shareholders say they are willing to assume average risk for average potential gain, and 35% are willing to accept above-average risk for above-average potential gain.1The actions of mutual fund shareholders would seem to validate their willingness to tolerate risk in order to reach financial goals: 80% own equity funds, which are generally considered the riskiest type of fund, considerably more than the 49% of shareholders who own less–risky money market funds.2Whether you are a conservative investor or an aggressive one, it’s likely there are mutual funds that match your risk tolerance. Fund to Fit YouInvestors with a long time horizon who are willing to accept more risk in pursuit of greater return potential may want to consider equity mutual funds, which typically invest in a portfolio of stocks that pursue the funds’ stated objectives.Investors who have a shorter time horizon and less appetite for risk may prefer bond mutual funds, which purchase debt issued by corporations and governments. This type of mutual fund is generally considered less volatile than an equity fund, provided that the fund manager trades bonds rated investment grade or higher. Bond funds are subject to the same inflation, interest–rate, and credit risks associated with the underlying bonds in the fund.For investors who have cash they will need in the short term, a money market mutual fund may be more appropriate. This type of fund typically invests in short–term debt instruments and is considered among the least volatile. Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund attempts to maintain a stable $1 share price, you can lose money by investing in a fund.Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.1–2) Investment Company Institute, 2006Principal Financial Group print this page 11100 Wayzata Blvd, Suite 161•Minnetonka, MN•55305Phone: (952) 277-4259Toll Free: 800 626 7095•Fax: (952) 277-4301www.joeswanson.com•swanson.joe@principal.com PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising Joe Swanson is licensed in Minnesota, Wisconsin, Oregon, and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.The words Financial Planning and Financial Advisor make no claims. Please see form ADV for disclosures. 401k plans and quotes are intended for Minnesota only and may be administered by other vendors including Fidelity, John Hancock, Principal Life, Nationwide Bisys, American
Tolerating Risk
Nearly all mutual fund shareholders acknowledge that investing in equity or bond mutual funds involves some degree of risk. About half of shareholders say they are willing to assume average risk for average potential gain, and 35% are willing to accept above-average risk for above-average potential gain.1The actions of mutual fund shareholders would seem to validate their willingness to tolerate risk in order to reach financial goals: 80% own equity funds, which are generally considered the riskiest type of fund, considerably more than the 49% of shareholders who own less–risky money market funds.2Whether you are a conservative investor or an aggressive one, it’s likely there are mutual funds that match your risk tolerance. Fund to Fit YouInvestors with a long time horizon who are willing to accept more risk in pursuit of greater return potential may want to consider equity mutual funds, which typically invest in a portfolio of stocks that pursue the funds’ stated objectives.Investors who have a shorter time horizon and less appetite for risk may prefer bond mutual funds, which purchase debt issued by corporations and governments. This type of mutual fund is generally considered less volatile than an equity fund, provided that the fund manager trades bonds rated investment grade or higher. Bond funds are subject to the same inflation, interest–rate, and credit risks associated with the underlying bonds in the fund.For investors who have cash they will need in the short term, a money market mutual fund may be more appropriate. This type of fund typically invests in short–term debt instruments and is considered among the least volatile. Money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund attempts to maintain a stable $1 share price, you can lose money by investing in a fund.Mutual funds are sold only by prospectus. Please consider the investment objectives, risks, charges, and expenses carefully before investing. The prospectus, which contains this and other information about the investment company, can be obtained from your financial professional. Be sure to read the prospectus carefully before deciding whether to invest.1–2) Investment Company Institute, 2006Principal Financial Group print this page 11100 Wayzata Blvd, Suite 161•Minnetonka, MN•55305Phone: (952) 277-4259Toll Free: 800 626 7095•Fax: (952) 277-4301www.joeswanson.com•swanson.joe@principal.com PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising Joe Swanson is licensed in Minnesota, Wisconsin, Oregon, and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.The words Financial Planning and Financial Advisor make no claims. Please see form ADV for disclosures. 401k plans and quotes are intended for Minnesota only and may be administered by other vendors including Fidelity, John Hancock, Principal Life, Nationwide Bisys, American
Tuesday, August 21, 2007
Deductions Still Available
What Tax Deductions Are Still Available to Me?
When Congress changed the tax codes with the Tax Reform Act of 1986, it eliminated many of the deductions that enabled many people to avoid paying income taxes. The revision was very thorough.
However, for those taxpayers who itemize, some key deductions remain.
For example, most if not all of your family’s unreimbursed medical and dental expenses may be deductible. If you had high medical or dental bills during the past year that weren’t covered by insurance, you may be able to deduct them from your adjusted gross income when you calculate your income taxes.
The following medical and dental expenses are deductible: examinations, surgical procedures, orthodontics, physical therapy, prescription drugs, cosmetic surgery, medical insurance premiums, and travel to and from facilities where medical treatment is given. Expenses that are not deductible include weight-loss programs, health club dues, diaper services, maternity clothes, smoking cessation programs, and nonmedical insurance premiums.
One key fact: you may only deduct medical and dental expenses to the extent that they exceed 71/2 percent of your adjusted gross income and were not reimbursed by your insurance company or employer.
In addition to medical and dental expenses, certain miscellaneous expenses — primarily unreimbursed employee business expenses — can be written off if they exceed 2 percent of your adjusted gross income. Some of the expenses that qualify for this deduction are: union dues, small tools, uniforms, employment agency fees, home office expenses, tax preparation fees, safe deposit box fees, and investment expenses. Your tax advisor will be able to tell you exactly what’s deductible for you.
The end of the year is the time to take one last good look and try to determine if you qualify or if you’re close.
If you’re not close to reaching those cutoffs, you may opt to postpone paying these expenses until the following year, when you may be able to deduct them.
On the other hand, if you’re only a little short of the threshold amount, you may want to hunt for additional expenses that will push you over the line.
With a little planning and some help from a qualified tax professional, you may be able to lower your income taxes this year. You just have to plan ahead.
11100 Wayzata Blvd, Suite 161
•
Minnetonka, MN
•
55305
Phone: (952) 277-4259Toll Free: 800 626 7095
•
Fax: (952) 277-4301
www.joeswanson.com
•
swanson.joe@principal.com
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising
Joe Swanson is licensed in Minnesota, Wisconsin, Oregon, and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.
The words Financial Planning and Financial Advisor make no claims. Please see form ADV for disclosures. 401k plans and quotes are intended for Minnesota only and may be administered by other vendors including Fidelity, John Hancock, Principal Life, Nationwide Bisys, American Funds and others
When Congress changed the tax codes with the Tax Reform Act of 1986, it eliminated many of the deductions that enabled many people to avoid paying income taxes. The revision was very thorough.
However, for those taxpayers who itemize, some key deductions remain.
For example, most if not all of your family’s unreimbursed medical and dental expenses may be deductible. If you had high medical or dental bills during the past year that weren’t covered by insurance, you may be able to deduct them from your adjusted gross income when you calculate your income taxes.
The following medical and dental expenses are deductible: examinations, surgical procedures, orthodontics, physical therapy, prescription drugs, cosmetic surgery, medical insurance premiums, and travel to and from facilities where medical treatment is given. Expenses that are not deductible include weight-loss programs, health club dues, diaper services, maternity clothes, smoking cessation programs, and nonmedical insurance premiums.
One key fact: you may only deduct medical and dental expenses to the extent that they exceed 71/2 percent of your adjusted gross income and were not reimbursed by your insurance company or employer.
In addition to medical and dental expenses, certain miscellaneous expenses — primarily unreimbursed employee business expenses — can be written off if they exceed 2 percent of your adjusted gross income. Some of the expenses that qualify for this deduction are: union dues, small tools, uniforms, employment agency fees, home office expenses, tax preparation fees, safe deposit box fees, and investment expenses. Your tax advisor will be able to tell you exactly what’s deductible for you.
The end of the year is the time to take one last good look and try to determine if you qualify or if you’re close.
If you’re not close to reaching those cutoffs, you may opt to postpone paying these expenses until the following year, when you may be able to deduct them.
On the other hand, if you’re only a little short of the threshold amount, you may want to hunt for additional expenses that will push you over the line.
With a little planning and some help from a qualified tax professional, you may be able to lower your income taxes this year. You just have to plan ahead.
11100 Wayzata Blvd, Suite 161
•
Minnetonka, MN
•
55305
Phone: (952) 277-4259Toll Free: 800 626 7095
•
Fax: (952) 277-4301
www.joeswanson.com
•
swanson.joe@principal.com
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising
Joe Swanson is licensed in Minnesota, Wisconsin, Oregon, and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.
The words Financial Planning and Financial Advisor make no claims. Please see form ADV for disclosures. 401k plans and quotes are intended for Minnesota only and may be administered by other vendors including Fidelity, John Hancock, Principal Life, Nationwide Bisys, American Funds and others
Friday, August 3, 2007
IRA rollover Minnesota
http://www.paladinregistry.com/LFP/article_detail.php?articleid=624&article_category
Nick Smith at www.joeswanson.com . Check out a five star planner and an aarticle about stretching an IRA for generations to come. This is based on the teachings of Ed Slott, CPA.
Nick Smith at www.joeswanson.com . Check out a five star planner and an aarticle about stretching an IRA for generations to come. This is based on the teachings of Ed Slott, CPA.
Friday, June 29, 2007
Roth IRA
Prepare to Convert In the past, only people with adjusted gross incomes of $100,000 or less were eligible to convert their traditional IRAs to Roth IRAs. The Pension Protection Act of 2006 repealed this rule, but it doesn't take effect until 2010. In another change starting in 2008, investors can make a direct rollover from an employer–sponsored retirement plan to a Roth IRA, treating it as a Roth conversion (income limits still apply until 2010). Fortunately, you have some time to decide whether a Roth IRA conversion would be an appropriate move for you. Probably the most popular reason for converting to a Roth IRA is the opportunity to receive tax–free withdrawals in retirement. Another benefit of a Roth is that there are no mandatory distributions during your lifetime. Although a tax–free retirement income might sound too good to pass up, there are some trade-offs and drawbacks when converting a tax–deferred retirement account to a Roth IRA. Here are some factors to consider. A Roth conversion may make sense if you expect to be in a higher tax bracket in retirement, or if you expect tax rates to be higher in the future. Consider this: By the time you are ready to retire, you may have little or no mortgage interest to deduct from your taxes. Your children will likely be grown and no longer your dependents for tax purposes. And you may not be making tax–deductible retirement plan -contributions. Taxes Today A Roth conversion requires that you pay income taxes that have been deferred on qualified retirement plan assets. You can convert the funds all at once or over multiple years. The amount you convert in a given year is included in your gross income when you calculate your taxes. One drawback is that if you use funds from the original retirement account to pay the taxes before you reach age 59½, it would be considered an early distribution and would be subject to a 10% federal income tax penalty. Of course, to qualify for a tax–free and penalty–free withdrawal of earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59½ or due to death, disability, or a first–time home purchase (up to a $10,000 lifetime maximum). Principal Financial Group Joe Swanson, CRPS http://www.joeswanson.com/
Friday, January 12, 2007
What Are the Advantages of Simplified Employee Pension Plans?
What Are the Advantages of Simplified Employee Pension Plans?
www.joeswanson.com
Simplified employee pension (SEP) plans enable small businesses to provide retirement benefits with lower costs and less reporting requirements than other qualified retirement plans. SEPs offer some attractive benefits for employers and employees alike.How Do SEPs Work?A simplified employee pension plan is basically a group of individual retirement accounts maintained for employees.Under a typical SEP plan, the employer establishes IRAs for all participating employees. The employer then contributes to the IRAs, subject to the contribution limits for SEPs — not IRAs. Employer contributions are limited to the lesser of 25% of the employee's compensation or $44,000 per year. The company’s contributions are not counted as current income for the employee.SEP plans provide an effective retirement planning option for employees. They also provide the employer with an effective tax shelter.Salary-Reduction OptionEmployees can also fund a SEP through a pre-tax salary reduction. Under a salary-reduction SEP, or SARSEP, employees can elect to defer up to $15,000 of their salary to the plan (in 2006). Employee funding further reduces costs to the employer.This salary-reduction feature enables a SEP to work much like a 401(k) plan. Note that no new SARSEP plans may be established after 1996, but contributions can continue to existing plans.AdvantagesSEPs are designed to provide a number of advantages.They have a significantly lower setup cost to the employer than regular pension or profit-sharing plans. They also offer simpler reporting and record-keeping requirements. For employees, SEPs offer substantially higher contribution limits than regular IRAs. This enables employees to accumulate more for retirement.The retirement benefits in a SEP are fully vested as soon as they are contributed. This makes a SEP completely portable. Departing employees can roll their SEP balances into an IRA or have them transferred to a retirement plan sponsored by their new employer. Simplified employee pensions can provide significant retirement benefits to employees while minimizing setup and administrative costs for employers. Withdrawals from SEP plans and traditional IRAs are taxed as ordinary income and, if taken prior to age 59 ½, may be subject to an additional 10% federal tax penalty.
© 2006 Emerald Publications
Joe Swanson, CRPS Minnesota Financial Planner
• Principal Financial Group, • 11100 Wayzata Blvd, Suite 161 • Minnetonka, MN • 55305 • Phone: (952) 277-4259
Toll Free: 800 277-7095 • Fax: (952) 277-4301 • www.joeswanson.com • swanson.joe@principal.com
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising Joe Swanson is licensed in Minnesota Wisconsin Oregon and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.
www.joeswanson.com
Simplified employee pension (SEP) plans enable small businesses to provide retirement benefits with lower costs and less reporting requirements than other qualified retirement plans. SEPs offer some attractive benefits for employers and employees alike.How Do SEPs Work?A simplified employee pension plan is basically a group of individual retirement accounts maintained for employees.Under a typical SEP plan, the employer establishes IRAs for all participating employees. The employer then contributes to the IRAs, subject to the contribution limits for SEPs — not IRAs. Employer contributions are limited to the lesser of 25% of the employee's compensation or $44,000 per year. The company’s contributions are not counted as current income for the employee.SEP plans provide an effective retirement planning option for employees. They also provide the employer with an effective tax shelter.Salary-Reduction OptionEmployees can also fund a SEP through a pre-tax salary reduction. Under a salary-reduction SEP, or SARSEP, employees can elect to defer up to $15,000 of their salary to the plan (in 2006). Employee funding further reduces costs to the employer.This salary-reduction feature enables a SEP to work much like a 401(k) plan. Note that no new SARSEP plans may be established after 1996, but contributions can continue to existing plans.AdvantagesSEPs are designed to provide a number of advantages.They have a significantly lower setup cost to the employer than regular pension or profit-sharing plans. They also offer simpler reporting and record-keeping requirements. For employees, SEPs offer substantially higher contribution limits than regular IRAs. This enables employees to accumulate more for retirement.The retirement benefits in a SEP are fully vested as soon as they are contributed. This makes a SEP completely portable. Departing employees can roll their SEP balances into an IRA or have them transferred to a retirement plan sponsored by their new employer. Simplified employee pensions can provide significant retirement benefits to employees while minimizing setup and administrative costs for employers. Withdrawals from SEP plans and traditional IRAs are taxed as ordinary income and, if taken prior to age 59 ½, may be subject to an additional 10% federal tax penalty.
© 2006 Emerald Publications
Joe Swanson, CRPS Minnesota Financial Planner
• Principal Financial Group, • 11100 Wayzata Blvd, Suite 161 • Minnetonka, MN • 55305 • Phone: (952) 277-4259
Toll Free: 800 277-7095 • Fax: (952) 277-4301 • www.joeswanson.com • swanson.joe@principal.com
PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of these web-sites provided here, you are leaving this site. Princor makes no representation as to the completeness or accuracy of information provided at these sites. Nor is the company liable for any direct or indirect technical or system issues or any consequences arising Joe Swanson is licensed in Minnesota Wisconsin Oregon and Ohio (additional states can be made available) to offer insurance products, and life insurance (including variable life), annuities (including variable annuities), securities and if applicable - investment advice. This site is not a solicitation of interest in any of these products in any other state. IMPORTANT CONSUMER INFORMATION: Joe Swanson may only transact business in a particular state after licensure or satisfying qualifications requirements of that state, or only if (s)he is excluded or exempted from the state's registration requirements. Follow-up, individualized responses to consumers in a particular state by Joe Swanson that involve either the effecting or attempting to effect transactions in securities or the rendering of personalized investment advice for compensation, as the case may be, shall not be made without first complying with the state's requirements, or pursuant to an applicable state exemption or exclusion. For information concerning the licensure status or disciplinary history of a broker-dealer, investment advisor, BD agent or IA representative or any financial institution (s)he represents, contact your state securities law administrator. Principal Life Insurance Company, Des Moines, IA 50392. Principal Life maintains certificates of authority to transact insurance in all 50 states. Its NAIC identification number is 61271.
Subscribe to:
Posts (Atom)