Brad Rosley, CFP, president elect of the Financial Planners Association, provides an in depth examination of defined benefit plans (pensions) and defined contribution plans (401k type plans) and presents valid reasons why companies and law firms of all sizes should consider implementing both.
When a firm or organization considers a retirement savings plan, it often looks only to personal or employer individual retirement accounts or a 401k plan. Overlooked are the benefits of a defined benefit plan (also commonly known as a pension plan). Organizations pass on a pension plan without giving it full consideration. Mr. Rosley lays out the similarities and differences between the two and provides compelling reasons why firms as small as two or three attorneys should consider using both plans.
By implementing a defined benefit plan, substantial tax savings can be realized, the cap on owner contributions can be avoided and partners and owners can realize substantial savings not possible with a defined contribution plan (401k).
After viewing this program, attorneys will gain a new insight into retirement savings options and will likely include a pension plan among those options where, previously, a pension would have been dismissed out of hand. |
