REVERSE DISCRIMINATION OF QUALIFIED RETIREMENT PLANS

Did You Know That… 

Qualified Retirement Plans Tend to Discriminate AGAINST the Highly Compensated? 

The restrictions placed on qualified retirement plans strictly limit the size of the benefits that can be accrued for highly-compensated employees. When compared to the benefits provided to lower-paid employees, these limitations can produce a “reverse discrimination” effect that results in qualified retirement plans replacing an inadequate percentage of an owner’s or key employee’s pre-retirement income. 

Eligible compensation that can be considered in applying these benefit or contribution limitations is capped at $275,000 in 2018 (as adjusted for inflation). 

There is, however, a solution to the inadequacy of qualified retirement plan benefits for owners and key employees…a selective executive benefit plan can be used to counter …

Heroes Finance 101: Understanding Retirement Plans

Gone are the days of our parents and grandparents in which retirement after working for a company for twenty years earned you a gold watch, pension and comfortable golden years.  The removal of pension plans from most major companies has angered many, but if you put yourself in the shoes of the owners and/or managers of those companies it makes sense.

Pension plans were created when the average lifespan was decades shorter than they are today, and while breakthroughs in health and medical technology have helped our society by allowing us to live longer and watch our grandchildren grow up, it’s causing great strain on those financial plans which are being pushed longer than ever anticipated.

I’m a rather stubborn