The Real Deal About Retirement Plans
With Melissa Terito, CPA
Summary:
In the 8th episode of the Confident Wealth Podcast, Bill Bush and Pete Bush talk with Melissa Terito, a partner and CPA at the accounting and business advisement firm Faulk & Winkler. She oversees their third party administrative practice (TPA) – branded as Sentinel Pension & Payroll. They share valuable information about the benefits that business owners have in setting up retirement plans for their employees. They also dispel a few misconceptions and assumptions that have been applied to retirement plans as well.
Time Stamped Show Notes:
- 00:35 – Bill Bush and Pete Bush introduce Melissa Terito and she shares her professional life.
- 01:33 – Businesses establish retirements plans because their employees are asking for this service and it makes for a great tax deduction.
- 03:15 – Melissa will run a contribution projection so that the business owner can see how much their new retirement plan will cost them and save them.
- 03:31 – Faulk & Winkler offers multiple retirement plans that include medical groups and a 2000-particpant union plan.
- 04:20 – Melissa does consulting on simple IRAs,
- 05:00 – Advantages to the employee for participating in retirement plans: it is easy, it is tax deductible, it grows tax deferred, and it gives them a knowledgeable advisor.
- 07:44 – The profit sharing contribution doesn’t need to be funded until the company files their tax return.
- 09:16 – The new plan tax credit can offset some start-up costs.
- 10:18 – The biggest problems that Melissa sees includes people not following the retirement plan document and assuming that part-time employees can’t participate in a 401K plan.
- 12:37 – Faulk & Winkler educates their customers on an ongoing basis.
- 13:12 – Full-time employees that drop down to part-time employees can’t be kicked out of their retirement plan.
- 13:57 – Options that clients need to make decisions on include: eligibility and do you want to be a safe-harbor plan.
- 16:44 – Trends that Melissa sees in terms of changing plans is making it possible to do during every pay roll period.
- 18:04 – Steps that a plan sponsor can make in giving themselves confidence that the plan is running smoothly for them: check that they have a fiduciary folder, discussion with an advisor, and 401K vs. Roth IRA.
- 20:50 – The closing credits
3 Key Points:
- Retirement plans offer advantages to employees such as being easy to set up, being tax deductible, growing tax deferred, and providing knowledgeable advisement.
- The profit sharing contribution is one of the few accrued deductions that a company can take on their tax return.
- Full-time employees that become part-time employees can’t be pushed out of their retirement plan.
Tweetable Quotes:
- “Expensive is relative…there are fees with setting up anything.” – Melissa Terito.
- “If your business gets audited, there is a chance that they are going to take a look at the simple IRA at some point.” – Melissa Terito
- “A lot of people don’t think that part-time employees can participate in a 401K plan.” – Melissa Terito.
Resources Mentioned:
