Retirement Planning
Retirement Planning for Individuals
IRA, 401(k) and 403(b) monies have a unique characteristic in our tax code. They are tax deferred. So, they have special attributes that require planning by an expert. There are required minimum distributions (RMDs) at certain ages, as well as penalties if withdrawals are made too early, and punitive penalties if the RMDs are not taken or taken out too late.
With appropriate planning, IRA-type assets can be a huge multi-generation wealth transfer tool with significant tax deferral attributes. However, many investment brokers and even some financial planners can be quite cavalier about the importance of attention to detail in planning with these special assets. In fact, some major investment companies structure their custodial agreements to prevent customers from taking advantage of these tax deferral opportunities.
Time and again, our firm has seen beneficiary arrangements that force high taxes on families long before it was necessary. A little bit of planning could have avoided a large tax bill.
One of the most overlooked yet critical parts of any estate plan is the beneficiary designation for a profit sharing, 401(k), IRA or pension plan accountholder. The wrong beneficiary designation could cause premature taxation. And without appropriate planning, the account could be exposed to the beneficiary’s creditors or predatory legal actions.
Probably the best tax deferral device today is a Roth IRA. However, Roth IRA conversions need to be reviewed very carefully, particularly in light of recent changes in the tax law.
Jay Kaufman has taken several specialty courses in this particular area, to ensure that the latest tax deferral techniques are available for his clients.
Retirement Planning for Businesses
A thorough knowledge of the law is required to ensure compliance with the tax and labor law requirements for retirement plans.
For more than 25 years, Kaufman Law Group has been designing, installing and administering profit sharing, 401(k) and pension plans for companies with fewer than 100 employees. Our clients have 401(k) plans, profit sharing plans, defined benefit pension plans and cash balance pension plans.
We are approved third party administrators for John Hancock, Transamerica and American Funds.
We design new plans and draft plan documents and summary plan descriptions. We have a system to prepare the entire cycle of annual plan administration including all contribution, vesting, discrimination and accounting reports including employee statements and all government filings, including Form 5500.
To ensure complete work and full compliance, Jay Kaufman has maintained a longstanding relationship with a pension actuary who reviews and certifies all of our clients’ defined benefit and cash balance plans.
We also have expertise in "fixing broken plans". We have used the IRS’ Employee Plans Compliance Resolution System on several occasions to assist clients in bringing their old retirement plans back into compliance. We have also used less formal procedures authorized by the IRS to correct plan defects.
Our retirement plan practice area is intentionally kept relatively small. This enables us to take a much appreciated close-contact approach with our select group of retirement plan clients.