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Congress believes that employers should be encouraged to assist individuals in this retirement planning stage. Congress recognizes that although many employees understand the importance of setting money aside, few understand the link between their retirement savings and their overall retirement planning. Therefore, Congress now permits employers who sponsor an employer retirement plan to provide Qualified Retirement Planning Services to employees or their spouses as a tax-free fringe benefit.
What makes this new development particularly interesting to self-employed individuals and small business owners is that it permits them to spend pre-tax dollars on retirement planning services. Additional benefits include increases in employee job satisfaction and retention, and employee plan participation.
The retirement planning service is available on an employer-paid basis. The value of the Qualified Retirement Planning Service itself is not charged to the employee or included in taxable income. Thus, the value of the service is not subject to Social Security, Medicare, or income tax withholding.
Highly compensated employees may only exclude the value of the service from income if the service is available on a non-discriminatory basis to each member of the group of employees that is normally provided education and information regarding the employer plan. This group of individuals generally includes all participants in the employer retirement plan. However, the IRS may permit employers to restrict retirement advice to individuals nearing retirement age under the plan.
The Qualified Retirement Planning Services an employer provides may include advice and information regarding retirement planning for an individual and/or his spouse about how the employer retirement plan fits into their overall retirement plan. Employer retirement plans includes SEPs, SIMPLEs, Profit Sharing Plans, Money Purchase Pension Plans, 401(k)s plans, annuity plans, and 403(b) and 457 plans. As always, the value of any tax preparation, accounting, legal or brokerage services provided by the employer must still be included in the taxable income of the employee.
If the availability of using pre-tax dollars to get good professional retirement planning advice is attractive to you, you will want to contact a qualified financial advisor. A qualified financial advisor can provide more information on the Qualified Retirement Planning Services available to you and your spouse.
The most obvious place to look for retirement planning services is to ask your friends and colleagues if they can recommend anyone. If someone is happy with the service they received from their retirement planner, they will be happy to recommend them to you. And, if someone has had a bad experience with a company, you will want to know that as well. You might end up with a collection of horror stories that can save you from making the same mistakes as your friends did.
Many workplaces offer this type of service to their employees, or have a list of recommended retirement planners. Set aside some time to meet with the person at your workplace who is responsible for your benefits. The Human Resources department can explain all the perks, investments and saving plans that your employer has for you to take advantage of. You might find that you have more options available to you than you knew about. This can certainly make planning for your retirement much easier.
Your television is one place you can collect the names of financial planners in your area. Watching their commercials can give you a feel for the type of business they run, and if it is a good fit for you. You can keep a running list of who is advertising, and what they offer. You might also find discounts and introductory special offers advertised on TV.
Online retirement planning services are becoming more popular, with most national banks and financial services offering information and tools online. You can explore their website at your leisure to decide if they offer services that might fit your needs. If you decide that you want to use their full service, they will probably charge you a fee in exchange for added online access to retirement planning services.
After you have done your due diligence, and found a couple of retirement planning services that might fit your needs, it's time to get on the phone and ask them a few questions. Some things you might ask include:
What services do you offer?
What service fees do you charge?
Do you have a department that specializes in retirement planning?
What hours are you open?
Do you offer online access?
What is the fee for the initial consultation?
What bank or financial institution are you affiliated with?
Make sure that your questions are adequately answered before you make an appointment. Reputable businesses will provide this information over the phone.
Finding the right retirement planning service is an important part of making sure you have the retirement you deserve. You want to work with someone who understands your goals, and lifestyle. If you want to maintain your current lifestyle, your retirement planner will need to know your current expenses so they can work out a plan that fits your style. You can never start too soon when it comes to planning your retirement. Try the suggestions above and you might be pleasantly surprised at the amount of help you can find.