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Alan Haft

Retirement Plans Cheat Sheet

The common belief that business owners canít put away much money into retirement plans debunked. How your clients can contribute up to $49,000 in some plans!

June 20, 2011
by Alan Haft

It recently felt as if the world was coming to an end.

I’m not talking about the recent doomsday prediction or another disaster caused by Mother Nature.

What I’m talking about is something far more challenging: level nine of Angry Birds.

In case you haven’t heard of the game, over the last year or so, this highly addicting adventure has held the number one spot on various app stores with seemingly no end in sight.

To prevent wasting precious hours of recreational time I rarely seem to have, I turned to my best resource to quickly help solve the level: my young daughter, who in a matter of a few short minutes, managed to cut through all the clutter and help guide me to a clear path of success.

While she’s my best resource on that subject, when it comes to figuring out the complex landscape of qualified retirement plans, I usually turn to the best resource I have to solve those complexities: Denise Appleby, a retirement planning professional out of New Jersey who has more certified designations than my short column can list and one who in a matter of a few short minutes, always seems to cut through all the clutter and help guide me to a clear path of success. 

If you’re like me, understanding the best retirement plan options for your clients can be a daunting task. To help assist you, I hope you’ll find the cheat sheet below a helpful guide. After all, few people I know of are prepared to get adequate income in retirement and understanding a few things about how the different plans work can really help people out.

The Major Plans

When hearing about retirement plans, many clients tend to think about the most popular of the bunch: individual retirement accounts (IRAs), 401(k)s or the Roth IRAs. While each of these certainly has its merits, one common belief is that business owners can’t put away all that much into these plans, which is generally true.

However, unbeknownst to many clients, other plans do allow for greater contributions, and that’s where life for some folks can get a bit more interesting. In fact, some plans allow for contributions of up to $49,000, and that’s nothing to sneeze at.

While no brief column can adequately detail all the plans out there, I find the cheat sheet below helps me when cutting through some of the clutter. Please understand, due to word count limitations, this is a very condensed summary of some key points and even with the full length sheet that can be found here, selecting the right plan for your clients still requires a more thorough analysis to determine which plan could work best for their needs.

View the cheat sheet.

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Alan Haft is an investment advisor representative with an insurance license, author of three books including the national bestseller, You Can Never Be Too Rich, and makes frequent appearances in national print, television and radio media such as The Wall Street Journal, Money Magazine, CNBC, BusinessWeek and many others.

For full disclosure, Haft is a part of a firm that utilizes all industries which typically includes us receiving percentage based fees for brokerage services as well as commissions when implementing insurance based plans. Haft does not work for any particular financial company or industry nor should this column be construed as an endorsement or condemnation for any particular product. Readers should note that all views and vendor recommendations as expressed in this article are solely the author’s and do not necessarily reflect the views of the AICPA CPA Insider™ or the AICPA.

* This article is not intended to provide financial planning, tax or legal advice and should not be relied upon as such. Any specific tax or legal questions concerning the matters described in this article should be discussed with your tax or legal advisor.