Profit Sharing Retirement Plan

A profit-sharing plan is a retirement plan that gives employees a share in the profits of a company.

Profit sharing retirement plan. A profit-sharing agreement used to be supplemental to a type of pension called a defined contribution plan. Profitability isnt a requirement to offer this type of plan and the flexibility that allows employers to adjust their contributions based on profitability is something many employers like. The contributions are tax-deductible for employers for the previous tax year.

The contributions are deductible as a business expense for the employer. All the money contributed to a profit-sharing plan accumulates tax deferred as it does with other defined-contribution retirement plans. Employers set up profit-sharing plans to help their employees save for retirement.

A profit sharing plan is a type of defined contribution plan that your employer puts money into in order to help you save for retirement. Profit-Sharing Plan Pros and cons. Latent Market--There are many business owners with 401k profit-sharing plans in place for whom the Qualified Combo Plan will be an attractive strategy.

The contributions and their earnings grow tax-deferred. Profit-sharing plans give employees a share in the profits of a company each year and can help fund their retirements. A profit-sharing plan is a type of defined contribution plan that allows companies help their employees save for retirement.

Strategy for business owners combining a Split-Funded Defined Benefit plan with a 401k profit-sharing plan. With a profit-sharing plan an employer establishes and makes voluntary contributions to employees retirement accounts. Employers can easily allocate contributions on their employees chosen retirement plan.

Profit sharing plans allow participants to have another type of retirement plans at the same time. Contributions from the company are discretionary. Need to test that benefits do not discriminate in favor of the highly compensated employees.