Featured Design

Proft Sharing Plans

Great for professional services companies that want to maximize pre-tax contributions for owners and key employees.

TAX DEDUCTIBLE

Contributions are tax deductible for the company.

EMPLOYEE GROUPING

Employees can be in categorized into groups with different benefits.

FLEXIBLE

Contributions are optional. You can choose whether to fund each year.

Targeted Savings with Flexibility

Profit sharing plans give companies the flexibility to group employees into different allocation groups. This allows company owners and key personnel to receive larger benefits than other groups, while satisfying non-discrimination rules.

Profit sharing plans can be used as stand-alone plans or they can be paired with a 401(k) or cash balance plan to achieve greater retirement savings.

Today

Thousand

401(k) + Profit Sharing Contributions

Per Person for 2020

After 15 Years

Million

Accumulated Retirement Savings

Assumes 6% Annual Return & $0 Starting Balance

Profit Sharing Allocation Methods

How profit sharing plans work.

Age Salary Salary Proportional FICA Integrated Age-Weighted New Comparability
Owner 1 53 $285,000 $55,253 $57,000 $57,000 $57,000
Owner 2 47 $150,000 $29,600 $30,113 $46,809 $57,000
Employee 1 40 $52,000 $10,261 $9,693 $9,167 $2,939
Employee 2 35 $48,000 $9,472 $8,948 $5,628 $2,713
Employee 3 35 $40,000 $7,893 $7,457 $3,119 $2,261
Employee 4 30 $35,000 $6,906 $6,524 $2,318 $1,978
Employee 5 25 $32,000 $6,315 $5,965 $1,659 $1,809
% to Owners 67.5% 69.3% 82.6% 90.7%

 

Hypothetical illustration only.  Actual results may differ.

What types of companies are ideal for a profit sharing plan?

Profit sharing plans are a great fit for professional service companies because there are often high-earning individuals that
are seeking to maximize their retirement savings on a pre-tax basis.

LAW FIRMS

Help partners and senior attorneys maximize their pre-tax savings.

MEDICAL PRACTICES

Physicians and their practice managers can accrue greater benefits.

ENGINEERING FIRMS

Architects & engineers can create different allocation groups.

CPA FIRMS

Various allocation methods help partners and managers find the right fit.

Ready for a Profit Sharing Plan?

Find out more about profit sharing plans today.

Find the right fit with profit sharing plan.