While establishing a retirement plan for your dental office, it is wise to look at a number of factors to determine the plan that best suits your personal and corporate objectives.
Sponsors often implement plans without considering the costs and liability to an employer. Retirement plans have specific requirements related to factors such as eligibility, employer contributions, vesting, and compliance tests, among many others. All these items should be part of a consultative discussion when you interview plan providers. However, the initial question is, why do you want to set up a plan in the first place? Is it primarily to accelerate your personal retirement planning, provide an additional benefit to staff, or attract and retain employees to help build a profitable practice?
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While that might sound like a simple question, there is more than just a single answer. Understanding the various types of available qualified plan options will help guide you to the plan that is best for you, and the underlying design of the plan itself. SIMPLEs, SEPS (Simplified Employee Pension plans), 401(k) profit sharing plans, and Defined Benefit and Cash Balance plans all have their place. What might sound like the best fit for you today may not necessarily be in the future — your personal objectives and company may change and evolve over time.
It’s important to keep in mind that setting up a retirement plan gives you additional roles, such as plan fiduciary and trustee. And, in April, there will be new fee disclosure rules that you will need to understand. Spending some time to learn about the points covered here will go a long way to establishing a successful retirement plan for you and your employees.
Tom Zgainer, VP of Corporate Retirement Plans at Personal Capital, has extensive experience in the 401(k) industry serving as Senior VP of Sales and Business Development at ExpertPlan. He played an integral role in building the Personal Capital 401(k). Contact him at [email protected] for help with your 401(k) plan or other retirement advice.