| Retirement is that most important juncture in the | | | | upon the uncertainties of stock markets for |
| life of a working person from where his life takes | | | | desired results. In addition to this, in the event of |
| an entirely different course, especially in financial | | | | any causality, death benefits for the surviving |
| matters. There are several retirement and | | | | family members are an inherent feature of these |
| pension plans available in the markets which are | | | | plans. The 412e3 is particularly more beneficial for |
| designed to suit the needs of each individual. The | | | | those in their peak earning period and belong to |
| major objective of the Economic Growth and | | | | 45 plus age group. Tax deductible contributions up |
| Tax Relief Reconciliation Act, 2001 was to | | | | to nearly 100% for your business are allowed |
| encourage the establishment of small business | | | | under such vehicles. |
| retirement vehicles. The tax deduction dollar limit | | | | Another remarkable feature is that they are |
| and compensation percentage has substantially | | | | exempted from the minimum funding requirement |
| increased for such plans as a measure of | | | | as applicable in case of traditional pension. |
| providing incentive to small business owners. For | | | | Retirement benefits can be broadly classified in |
| this very purpose, 412e3 plans are very popular | | | | two categories- defined benefit and defined |
| and have proved to be effective in providing | | | | contribution based upon the method according to |
| desired benefits to the investors. | | | | which benefits are arrived at. Such plans are ideal |
| A 412e3 pension is a tailor made vehicle aimed to | | | | for those business owners who have |
| maximize your retirement benefit and take care | | | | comparatively lesser number of employees who |
| of your finance in a better way. Although there | | | | can commit to make large and regular |
| are some other pensions available with some | | | | contributions. This plan is the most suitable for |
| insurance companies like 422is and 401ks but | | | | those types of businesses which are well |
| investment limit in these is far less in comparison | | | | established and highly profitable. |
| to 412e3. These pensions are especially | | | | Plan 412e3 is popular because of having simpler |
| formulated to maximize tax deductible retirement | | | | terms and conditions as opposed to traditional |
| contributions of your business. In case of 422is, | | | | benefit plans which have a lot of complications. In |
| there is not a wide scope of desired benefit as | | | | such a plan, there is no compulsion for obtaining |
| contributions to this plan are limited. | | | | enrolled actuaries certificate and administrative |
| Another special feature of this retirement | | | | cost of such plans are considerably on lower side |
| investment is that while you can substantially | | | | as compared to other plans. Due to all these |
| augment the retirement incomes for yourself and | | | | factors, 412e3 plans are much popular among the |
| for your employees also, you do not have to rely | | | | small business owners. |