PLANADVISER - September/October 2022 - 36
beyond 401(k) / small plans
Scaling for the Future
I
A SEP plan or SIMPLE can be a bridge to a traditional DC plan
t is no secret that the U.S. faces a
significant retirement coverage gap.
Anyone without a retirement plan,
either through his employer or selfdirected,
is considered in the gap. The
lack of coverage is just one issue, as
many Americans either have yet to
start saving or started saving late and
must catch up. The difference between
what
individuals have accumulated
and what they need in order to maintain
a minimum standard of living in
retirement is called the savings gap,
and, says T. Rowe Price's " 2022 Retirement
Market Outlook, " the disparity is
approaching $4 trillion.
The problem is especially acute for
self-employed individuals and small
businesses. According to data from
the Aspen Institute Financial Security
Program, these groups are often the
last to think about creating a retirement
plan, because they tend to be
short on resources and time. Those
that do take the time, though, will find
a few options: The savings incentive
match plan for employees (SIMPLE)
and simplified employee pension
(SEP) plan are the most common. Both
types allow individuals and/or small
employers to contribute a portion of
their income to retirement savings in
a tax-advantaged manner.
Either option can be a great starting
point, but it will also come with drawbacks.
According to plan rules for
SIMPLEs,
if a business grows past
100 workers, it will no longer qualify.
That can be tricky for a small business
working on actively increasing
its headcount. Contributions for either
plan type are also capped at a lower
rate than are those for a 401(k) plan.
For a SEP plan, for example, IRS rules
say contributions may not exceed 25%
of the employee's income, and the
employee herself may not contribute.
As with 401(k) plans, the IRS
updates SIMPLE contribution limits
annually. For 2022, the limit for
SIMPLEs is $14,000 vs. $20,000 for a
36 | planadviser.com September-October 2022 Art by Irene Servillo
http://www.planadviser.com
PLANADVISER - September/October 2022
Table of Contents for the Digital Edition of PLANADVISER - September/October 2022
The Possibilities Ahead
The Full Potential
2022 PLANADVISER National Conference
NQDC Investment Menus
Reg BI’s Impact on 403(b)s
PEPs’ Slow Growth
Scaling for the Future
Rollover Rules for 457(b) Plans
Jorge Bernal
PLANADVISER - September/October 2022 - Cover1
PLANADVISER - September/October 2022 - Cover2
PLANADVISER - September/October 2022 - 1
PLANADVISER - September/October 2022 - 2
PLANADVISER - September/October 2022 - 3
PLANADVISER - September/October 2022 - 4
PLANADVISER - September/October 2022 - 5
PLANADVISER - September/October 2022 - 6
PLANADVISER - September/October 2022 - 7
PLANADVISER - September/October 2022 - 8
PLANADVISER - September/October 2022 - 9
PLANADVISER - September/October 2022 - 10
PLANADVISER - September/October 2022 - 11
PLANADVISER - September/October 2022 - 12
PLANADVISER - September/October 2022 - 13
PLANADVISER - September/October 2022 - 14
PLANADVISER - September/October 2022 - 15
PLANADVISER - September/October 2022 - The Possibilities Ahead
PLANADVISER - September/October 2022 - 17
PLANADVISER - September/October 2022 - 18
PLANADVISER - September/October 2022 - 19
PLANADVISER - September/October 2022 - 20
PLANADVISER - September/October 2022 - 21
PLANADVISER - September/October 2022 - The Full Potential
PLANADVISER - September/October 2022 - 23
PLANADVISER - September/October 2022 - 24
PLANADVISER - September/October 2022 - 25
PLANADVISER - September/October 2022 - 2022 PLANADVISER National Conference
PLANADVISER - September/October 2022 - 27
PLANADVISER - September/October 2022 - 28
PLANADVISER - September/October 2022 - 29
PLANADVISER - September/October 2022 - NQDC Investment Menus
PLANADVISER - September/October 2022 - 31
PLANADVISER - September/October 2022 - Reg BI’s Impact on 403(b)s
PLANADVISER - September/October 2022 - 33
PLANADVISER - September/October 2022 - PEPs’ Slow Growth
PLANADVISER - September/October 2022 - 35
PLANADVISER - September/October 2022 - Scaling for the Future
PLANADVISER - September/October 2022 - 37
PLANADVISER - September/October 2022 - 38
PLANADVISER - September/October 2022 - Rollover Rules for 457(b) Plans
PLANADVISER - September/October 2022 - Jorge Bernal
PLANADVISER - September/October 2022 - Cover3
PLANADVISER - September/October 2022 - Cover4
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