Getting A Good Start
Changes In Your Situation
Law Changes - Keep Up And Amend
Changing Plan To Keep Up
Keeping Your Plan After Retirement
Spending - Retirement Or A Rainy Day
Leaving It To Your Heirs

Changing Plan To Keep Up

If your situation changes, you need to inform us about the changes as they happen, and we will suggest to you alternatives:

  1. Amending the benefits to a higher or lower level; amending vesting and/or eligibility; exclusions
  2. Freezing or terminating your existing plan,
  3. Adding on a second plan but dramatically revising the main plan to provide you with the major benefits, or
  4. Other useful alternatives as the situation warrants.

Freezing or terminating your existing plan:

  • One solution you can use to take care of a major change in your business (new employees, or if your business income has dropped dramatically), is to freeze benefits under the plan – some plans, such as Profit Sharing allow you to do this without an amendment, and for Defined Benefit Plans and 401k plans, you can make this change with amendments to the plan
  • A second, more drastic, solution, would be to terminate the plan – you would normally terminate the plan only if you expect the changes to be permanent, but termination is a real choice you can make

Adding a second plan:

  • If you add on several employees, often we can use a combination of the plan you have already (which provides significant benefits to owners), with a second plan (often a 401k or a tiered Profit Sharing, or a Frozen Money Purchase), which allows you to continue meeting your goals; adding a second plan usually means changing your original plan to exclude certain employee groups, or to provide reduced benefits to certain employee groups

Other useful alternatives:

  • This covers a wide area of changes, but we will list a few
  • If you dissolve or sell your corporation, you can adopt a sole proprietorship and have it be added as an additional sponsor of the retirement plan
  • If there are employees but the majority of the owner’s retirement plan assets (including large rollover IRAs) are rolled into a Frozen Money Purchase plan, then the owner is free to invest the assets in such vehicles as he/she chooses, including real estate and others
  • Often companies go through growth and later shrinkage of employees, and we need to take a reverse process after shrinkage
  • Your retirement plan should be one part of an overall Investment Plan; you should continually update the overall Investment Planning, and make such changes to the retirement plan as are useful to keep it fitting in the overall “General Investment Plan” – use your IP Planner tool...Investment Planning
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