b'(continued from page 4) recurring," for your plan to remain qualified). The plansimilar to SIMPLE IRAs, but can also allow loans must contain a formula for determining how yourand Roth contributions. Because they\'re still contributions are allocated among plan participants. Aqualified plans (and therefore more complicated than separate account is established for each participant thatSIMPLE IRAs), and allow less deferrals than holds your contributions and any investment gains ortraditional 401(k)s, SIMPLE 401(k)s haven\'t become losses. Generally, each employee with a year ofpopular. service is eligible to participate (although you can require two years of service if your contributions areDefined benefit plan immediately vested). Contributions for any employeeA defined benefit plan is a qualified retirement plan in 2023 can\'t exceed the lesser of $66,000 (up fromthat guarantees your employees a specified level of $61,000 in 2022) or 100% of the employee\'sbenefits at retirement (for example, an annual benefit compensation.equal to 30% of final average pay). As the name suggests, it\'s the retirement benefit that\'s defined, not 401(k) planthe level of contributions to the plan. In 2023, a The 401(k) plan (technically, a qualified profit-sharingdefined benefit plan can provide an annual benefit of plan with a cash or deferred feature) is a popularup to $265,000 (or 100% of pay if less), up from retirement savings vehicle for small businesses. With$245,000 in 2022. The services of an actuary are a 401(k) plan, employees can make pre-tax and/orgenerally needed to determine the annual Roth contributions in 2023 of up to $22,500 of paycontributions that you must make to the plan to fund ($30,000 if age 50 or older; up from $20,500 andthe promised benefit. Your contributions may vary $27,000, respectively, in 2022). These deferrals gofrom year to year, depending on the performance of into a separate account for each employee and aren\'tplan investments and other factors. taxed until distributed. Generally, each employee with a year of service must be allowed to contribute to theIn general, defined benefit plans are too costly and plan.too complex for most small businesses. However, because they can provide the largest benefit of any You can also make employer contributions to yourretirement plan, and therefore allow the largest 401(k) planeither matching contributions ordeductible employer contribution, defined benefit discretionary profit-sharing contributions. Combinedplans can be attractive to businesses that have a employer and employee contributions for anysmall group of highly compensated owners who are employee in 2023 can\'t exceed the lesser of $66,000,seeking to contribute as much money as possible on up from $61,000 in 2022 (plus catch-up contributionsa tax-deferred basis. of up to $7,500 if your employee is age 50 or older) or 100% of the employee\'s compensation. In general,As an employer, you have an important role to play each employee with a year of service is eligible toin helping America\'s workers save. Now is the time receive employer contributions, but you can requireto look into retirement plan programs for you and two years of service if your contributions areyour employees. immediately vested. IMPORTANT DISCLOSURES 401(k) plans are required to perform somewhatBroadridge Investor Communication Solutions, Inc. does not provide complicated testing each year to make sure benefitsinvestment, tax, legal, or retirement advice or recommendations. The information presented here is not specific to any individual\'s personal aren\'t disproportionately weighted toward higher paidcircumstances. employees. However, you don\'t have to perform discrimination testing if you adopt a "safe harbor"To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose 401(k) plan. With a safe harbor 401(k) plan, youof avoiding penalties that may be imposed by law. Each taxpayer generally have to either match your employees\'should seek independent advice from a tax professional based on his or contributions (100% of employee deferrals up to 3%her individual circumstances.of compensation, and 50% of deferrals between 3%These materials are provided for general information and educational and 5% of compensation), or make a fixedpurposes based upon publicly available information from sources contribution of 3% of compensation for all eligiblebelieved to be reliablewe cannot assure the accuracy or completeness of these materials. The information in these materials employees, regardless of whether they contribute tomay change at any time and without notice. the plan. Your contributions must be fully vested. 620-343-7937 800-636-8016 Another way to avoid discrimination testing is byTracy.L.Edwards@ampf.com adopting a SIMPLE 401(k) plan. These plans arewww.ameripriseadvisors.com/tracy.l.edwards 5'