Catch-up contributions are also allowed in addition to the maximum contribution amount for individuals who attain age 50 before the end of the taxable year. $4,000 additional for 2005. In doing so, they avoid current income taxes on the deferred amounts and on any plan earnings the amounts generate. No tax will be due until plan benefits are distributed.
|
Year |
Maximum annual deferral amount |
|
2003 |
$12,000 |
|
2004 |
$13,000 |
|
2005 |
$14,000 |
|
2006 |
$15,000 |
If your company already has a profit-sharing or other "defined contribution" plan, a 401(k) option is easy to add. Your only additional expense is the administrative costs. Generally, with a pre-existing plan, these costs are low. If you are implementing a new qualified plan, the expense and paperwork of adding the 401(k) feature along with your plan are minimal.
There are a variety of ways you can structure your plan. And no matter what plan you choose, Regions will provide you with full support in all stages of planning, development and implementation. If you'd like to learn more, contact us at 1-866-951-9511.
