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Our objective is to make life easy for all retirement plan stakeholders. We do our best to thoroughly explain the features and benefits of our smart retirement solutions. Sometimes, you may still have a question. Click on these Frequently Asked Questions (FAQs) to get the information you need to understand why smart retirement solutions are best in class. 

  • Can a contribution be made to a SEP IRA of a participant over age 70 1/2?
    Contributions must be made for each eligible employee in a SEP, even if over age 70 1/2. However, an employee over age 70 1/2 must take minimum distributions.
  • How are contributions processed?
    Employers can remit contributions online through the employer section of the recordkeeping system. To complete the transaction, the employer uses the Processes functionality. Funds are transmitted by ACH.
  • Why contribute to a 457 plan?
    - Reduce taxable income - Save for retirement - Contributions and earnings grow tax-deferred - Ability to contribute to a 403(b) or a 401(k), if offered by employer
  • How much can be contributed to a 457 plan?
    For 2013, workers are able to contribute the lesser of: - The IRC 402(g) employee elective deferral limit of $17,500, or - Up to 100% of includable compensation (must be less than the elective deferral limit). Clients age 50 and over may contribute an additional $5,500. Employers are not required to offer this provision. One major difference between a 457 and a 403(b) is that in the 457, the $17,500 contribution limit is inclusive of both the employee and employer contributions.
  • Can I make Roth contributions to my 457 account?
    457 governmental plans are now permitted to add the Roth option to their plan, effective January 1, 2011.
  • What are my options if I change jobs?
    An employee’s options when switching jobs are: - 457 money can be moved into the new employer’s 457, 403(b) or 401(k) if the plan accepts such transfers, or into a Rollover IRA - Public (governmental) plan 457 money is not subject to the age 59 1/2 withdrawal restriction, so money can be withdrawn (subject to income tax on the full amount) without incurring a 10% early withdrawal penalty - Leave the money where it is, if the plan allows Please note that if you roll governmental 457 money into a 403(b), 401(k), IRA or any other plan (other than a 457 plan), you will lose the benefit of taking premature withdrawals without penalty. Conversely, if you roll 403(b) money into a 457 plan you do not avoid the 10% early withdrawal penalty. The plan provider or sponsor is required to account for this money separately.
  • Who can contribute to a Traditional IRA?
    IRA contributions can be made if there is earned compensation and the account holder will not reach 70 1/2 by the end of the year.
  • How much can I contribute to a Traditional IRA?
    The contribution limit for 2013 is $5,500. Account holders age 50 and over can contribute an additional $1,000. Contributions are tax deductible (depending on income level).
  • Can I take a withdrawal from a Traditional IRA? If so, is there a penalty?
    Withdrawals from Traditional IRAs are taxed upon distribution, benefitting account holders who wait until they retire and have a lower tax bracket to begin withdrawals. Withdrawals taken before age 59 1/2 are subject to a 10% penalty. Certain exceptions may apply, such as: - Rollover into another Traditional IRA - Conversion to a Roth IRA • Used to buy, build or rebuild a first home • Disability Please consult with a competent tax advisor for information about your own particular situation.
  • Can I roll my retirement plan account into a Traditional IRA?
    Qualified retirement plans, such as 401(k), 403(b) and 457 plans, can be rolled into a Traditional IRA. However, the rollover should be identified as such in the account.
  • Can I roll my Traditional IRA into a qualified plan account?
    Yes, a Traditional IRA can be rolled over into a qualified plan, assuming the qualified retirement plan has language permitting such rollovers.
  • How much can I contribute to a Roth IRA?
    The Roth contribution limit for 2013 is $5,500. Account holders age 50 and over can contribute an additional $1,000. Contributions are subject to income limitations. Please consult your tax professional and IRS code for details.
  • I have a Traditional IRA. Can I contribute to a Roth IRA as well?
    Yes. Account holders can contribute to both a Traditional and a Roth IRA; however, the limits on annual contributions apply to any combination of Traditional and Roth IRA contributions that you make for the year.
  • What are the criteria for a “qualified Roth distribution”?
    First, it must be at least 5 years since the account was set up and the first contribution made. After that, Account Holders must meet one of the following criteria: - At least 59½ years old, - Distribution is being used to buy or rebuild a first home, or - Disabled A distribution made to a beneficiary after the Account Holder’s death is also a qualified distribution.
  • How much can I contribute to an SIMPLE IRA?
    The contribution limit for 2013 is $12,000. Account holders age 50 and over can contribute an additional $2,500.
  • Will my employer contribute to my SIMPLE IRA each year?
    If you contribute to your SIMPLE IRA, your employer must do so as well. The employer can choose to match up to 3% of compensation for participating employees or contribute 2% of compensation into all employee accounts.
  • May I contribute to a personal IRA as well as my SIMPLE IRA?
    Yes. For 2013, you can contribute up to $5,500 ($6,500 if you’re age 50 or older) to an IRA that’s separate from your SIMPLE IRA. However, depending on your income and tax filing status, your contribution may not be tax-deductible.
  • What types of contributions may be made to a SIMPLE IRA plan?
    Each eligible employee may make a salary reduction contribution and the employer must make either a matching contribution or a non-elective contribution. No other contributions may be made under a SIMPLE IRA plan.
  • As an employer with a SIMPLE IRA plan, what are my choices for contributing to my employees’ SIMPLE IRA accounts?
    You can contribute in one of two ways: 1. Salary Match – you can choose to match up to 3% of the employee’s contribution; or 2. Non-elective contribution – you can choose to contribute 2% of each eligible employee’s compensation. (For 2013, only $255,000 of the employee’s compensation can be considered to figure the contribution limit.)
  • As a business owner, how do I calculate my own contributions if I’m self-employed?
    Use your net earned income to calculate your contributions for the year. Net earned income is the income you earn from personal services to or on behalf of your business, minus your deductions (excluding any contributions to your account). You may contribute up to the annual salary deferral contribution limit or 100% of your net earned income, whichever is less.
  • What are the current contribution limits for a participant in a SIMPLE IRA?
    Salary reduction contributions (employee-directed contributions or elective deferrals) under a SIMPLE plan are limited to $12,000 for 2013. Employees age 50 and over can contribute an additional $2,500.
  • What is the deadline for the remittance of employees’ SIMPLE IRA contributions?
    Contributions must be remitted no later than 30 days after the end of the month in which the money is withheld from the employees’ pay.
  • How do I remit SIMPLE IRA contributions?
    You can remit contributions by filling in and signing the Aspire Contribution Transmittal Form. Mail this form, along with the contribution check, to Aspire at the address listed on the form. Aspire also accepts Automated Clearing House (ACH) payments and wire transfers.
  • When are SIMPLE IRA contributions vested?
    All SIMPLE IRA contributions, both employer and employee, are immediately 100% vested.
  • How are contributions made to a SEP IRA?
    Under a SEP, an employer contributes directly to the SEP IRA accounts for all eligible employees (including the employer).
  • Can an employee contribute to a SEP IRA?
    A SEP IRA account is set up for employer contributions. An employee, however, may elect to contribute to the same account to meet their personal maximum, as allowed by IRS regulations. The employee would select both the SEP option on the account application AND one of the contributory account options (Traditional or Roth). No additional account fees apply. These contributions would be submitted separately by the employee to fund the account. The limits for the SEP employer contributions and the individual’s Traditional or Roth IRA contributions are different and do not affect each other. However, an employee’s participation in the SEP may affect his or her ability to deduct the Traditional IRA contributions. Please verify the IRS regulations that pertain to your particular situation.
  • How much can an employer contribute to a SEP IRA?
    An employer may contribute up to 25% of the eligible employee’s compensation provided the contribution does not exceed $51,000 for 2013.
  • Must the same percentage of salary/wages be contributed for all participants?
    Most SEPs, including the IRS model Form 5305-SEP, require that allocations to all employees’ SEP IRAs be proportional to their salary/wages. A self-employed owner’s contribution is based on net profit minus one-half self-employment tax minus the contribution for him or herself.
  • Can catch-up contributions be made to a SEP?
    No. SEPs are funded by employer contributions only. However, catch-up contributions can be made to the IRAs that hold the SEP contributions if the SEP IRA documents allow. The catch-up IRA contribution amount (for employees age 50 and older) is $1,000 for 2013 and later years.

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