Retirement Planning

IRA (Traditional or Roth) Deadline to establish the plan and the Deadline to fund the plan is April 15th of the following year.
SEP IRA - Deadline to establish the plan is the due date of the tax return, including extensions and the Deadline to fund the plan is due date of the tax return, including extensions.
Simple IRA - Deadline to establish the plan is October 1st of that year and the Deadline to fund the plan for the Employee contributions must be withheld from pay by December 31st and remitted to the investment firm as soon as reasonably possible and the Employer contribution must be made by the tax return due date, including extensions.
401-K or 403(b)- Deadline to establish the plan is October 1st of that year for safe harbor plans, otherwise December 31st of that year. Deadline to fund the plan for the Employee contributions must be withheld from pay by December 31st and remitted to the investment firm as soon as reasonably possible and the Employer contribution must be made by the tax return due date, including extensions.
Defined Benefit Plans and Profit Sharing Plans and Keough Plans must be set up by Dec 31st of that tax year.

Yes, Pension Plan Limitations have increased. The maximum amount that an employee may elect to defer to an Code Sec. 401(k) cash or deferred compensation plan is $17,500 in the 2013 tax year (up from $17,000 in 2012). The maximum amount that an employee/participant may elect to defer to a savings incentive match plan for employees (SIMPLE plan) remains at $12,000. The limitation on total annual contributions to defined contribution plans is $51,000 (up from $50,000 in 2012). The annual benefit limit for defined benefit plans is $205,000 (up from $200,000 in 2012). The limitation on deferrals for Code Sec. 457 deferred compensation plans of state and local governments and tax-exempt organizations increases from $17,000 to $16,500 in 2012. The limitation used in the definition of a highly compensated employee remains the same from $110,000 to $115,000 in 2013.

Some advantages of a SEP Simplified Employee Pension Plan are: Contributions to a SEP are tax deductible and your business pays no taxes on the earnings on the investments. You are not locked into making contributions every year. In fact, you decide each year whether, and how much, to contribute to your employees’ SEP-IRAs. Generally, you do not have to file any documents with the government. Sole proprietors, partnerships, and corporations, including S corporations, can set up SEPs. You may be eligible for a tax credit of up to $500 per year for each of the first 3 years for the cost of starting the plan. Administrative costs are low.

If you withdraw money from a SIMPLE IRA in the first 2 years, you will be subject to a 25% withdrawal penalty. This is 15% higher than a traditional IRA premature distribution penalty.

The biggest benefit for a business with a Simple IRA plan is that it provides a very easy way to provide an employee retirement option without all the technical complications of 401Ks and similar account plans. Second, the establishment and maintenance costs to run a Simple IRA plan are a big plus for the cost-conscious business. Additional benefits include No special plan-level tax reporting is required for the employer annually. No discrimination testing is necessary. There is no requirement on the employer to track vesting. All contributions are immediately 100% vested (at the point of deposit the employee owns the full amount in the retirement account without any time delay).

Yes. www.rothira.com

Generally, if your retirement pension is from work where you also paid Social Security taxes, it will not affect your Social Security benefit. Pensions based on work that is not covered by Social Security such as the federal civil service and some state, local, or foreign government systems probably will reduce the amount of your Social Security benefit. Speak to your local CPA or the Social Security Administration for more details.

If you qualify, you will continue to receive your social security Disability benefits as long as your condition keeps you from working. Your case will be reviewed periodically to see if there has been any improvement in your condition and whether you are still eligible for benefits. If you are still disabled when you reach full retirement age, your disability benefit will be automatically converted to a retirement benefit of the same amount.

If you receive Social Security Disability benefits, you will become eligible for Medicare after the date Social Security decides your disability began. Speak to the Medicare Administration via e-mail at www.hcfa.gov. There also is a Medicare website at www.medicare.gov. for more details.