SEP-IRA vs MICRO(k)

Participant with $100,000 of W2 Wages in 2017

THE DEFINED CONTRIBUTION DIFFERENCE

Favorable tax laws have made 401(k) plans very attractive to the small business owner. The benefits of a Defined Contribution plan include:

  • Increased Deferral Limits
  • Roth 401(k) Option
  • Automatic Enrollment
  • "Safe Harbor" Feature
  • A Micro(k) plan is a low-cost 401(k) plan for businesses that have no rank-and-file (common-law) employees and require limited reporting and disclosure under ERISA. Should your client’s business have eligible employees, we can often design plans that will still favor the owners and perhaps other groups of employees (e.g. managers). All of our “Next Level” plans allow substantial investment freedom and the ability for participants to elect life insurance on themselves or family members.

    The chart below details the various 401(k) plans Security Mutual Life offers.

      Micro(k)® Safe Harbor 401(k) Dash 401(k)
    Has Common-law Employees? No,
    Owners Only
    Yes Yes
    Owners are Older than Others? N/A No Yes
    Can Favor Specific Groups? N/A No Yes
    Prototype Plan? Yes Yes No
    Administrative Cost Low Moderate High
    May Offer Life Insurance Yes Yes Yes
    Suitable Funding Product Annuities
    Life Insurace
    Mutual Funds
    Auxiliary Funds
    Group Annuities
    Life Insurance
    Mutual Funds
    Managed Funds
    Group Annuities
    Life Insurance
    Mutual Funds
    Managed Funds

    GET A DEFINED CONTRIBUTION DESIGN STUDY

    Before we can help you review plan design options, we need to know three basic things:

  • Who is there?
  • What do they have now?
  • What are the goals and/or the budget?
  • Use one of our "Form Fillable" Fact Finders to communicate your case to our qualified plans design team. For businesses with at least one owner and rank-and-file employees please use our standard Fact Finder (form no. 0010297XX). For an owner-only 401(k) plan, Security Mutual's Micro(k) plan please use our Micro(k) Fact Finder (form no. 0011125XX).

    The Design Team at Security Mutual Life provides comprehensive support to appointed representatives at no cost.

    If you are not yet contracted with us but would like to discuss options please click here.

    Dowload our Fact Finder Dowload our Micro(k)Fact Finder

    DOWNLOAD SECTION

    Security Mutual Life offers a variety of marketing materials for qualified plans.

    Please click on one of the links below to view our marketing materials.

    401(k) & PROFIT SHARING PLANS

    Download Security Mutual Life flyers pertaining to 401(k) and Profit Sharing plans by clicking on the link above.

    MICRO(k) PLANS

    Download flyers and more related to Security Mutual Life's Micro(k) program by clicking on the link above.

    SEP-IRA

    Security Mutual Life offers a comprehensive package to start a SEP-IRA and more. Please click on the link above.

    SAI INSTALLATION FORMS

    Download one of the SAI installation packages that contain the necessary forms to set up a new qualified plan.

    Additional Marketing Materials

    PLAN LIMITS & "P's & Q's"

    You have pension questions, we have answers. View the 2017 Plan limits and get answers to your pension questions.

    LIFE INSURANCE INFORMATION & SALES CONCEPTS

    Learn about Security Mutual Life's unisex life insurance products offered in qualified plans, as well as sales concepts using such products.