I'm often asked about Cash Balance Plans. They are pension plans that allow for much larger contributions, in addition to the standard 401(k) and profit sharing contributions.

In general, they work well for small professional businesses, with business owners of any age, that know they will have significant and ongoing revenue and would like to limit their taxes on the business' income.

Here's a short article from the National Association of Plan Advisors I liked with some basics about whether it's a good fit:  When Might a Cash Balance Plan Be a Good fit?

On December 29, 2022, President Biden signed the SECURE 2.0 Act which has many changes and options for retirement plans. Among them is the following:

New plans for employers with under 50 employees who have not had an existing plan in the prior 3 taxable years, including SIMPLE or SEP, may get a 100% tax credit for eligible start up costs.

Such new plans may even get up to 100% of a tax credit for employer contributions (match or profit sharing) for the 1st two years, with partial credit for the next 3 years.

As always, there are many details about this, so please contact me for additional information and to make sure your potential new plan will qualify.

Wow, 7/1/22 and it's 5 years since formally going into business as Hawaii5500 LLC.

What an interesting and unbelievable five years it's been, personally, professionally and globally.

I'm happy to say that Hawaii5500 is thriving and continues to grow.

Mahalo to all who believe in us.

Just released – 2021 Retirement Plan Limits.  There were only a few limits that changed, of note:

• Maximum Compensation Limit increased from $285,000 to $290,000
• Maximum Dollar limit to Defined Contribution Plans increased from $57,000 to $58,000

 
Note that the following limits remain the same for 2021:

• 401(k) calendar year limit of $19,500
• 401(k) calendar year catchup limit of $6,500
  

Some thoughts to consider when choosing a service provider:

• Are the fees reasonable, and have they always been reasonable?  Do you receive surprise billing?
• Is having local contacts important to you?  Do you have to fit your phone calls into your service provider's time zone?
• Who will be performing the work on your account and who will be your direct contacts?  Is your data being outsourced to multiple locations without your knowledge?  Do you have to call multiple numbers? 
• Does your service provider engage in multiple lines of business, thereby stretching their focus thin, or do they focus exactly on the service that you are looking to engage them with?
• Do they charge you a fee (up to $1,000) simply for terminating their service agreement when no work is required of them?
• Do they stand on their own merits or do they attack their competitors in order to gain client loyalty?

Any questions you might have, please do not hesitate to contact me at 808-5500-080 or Lila at 808-754-2747 or contact me below.

A bill has been introduced to increase the automatic cashout limit for terminated participants from $5,000 to $8,000.  Hawaii5500 will keep you updated.

Stay tuned for updates regarding the recently passed SECURE Act as well as Hardship Withdrawal Amendment requirements.

For 2019:

• Maximum 401(k) = $19,000 (increased from $18,500)
  
• 401(k) catchup (if over age 50) remains the same at $6,000
  
• Maximum 401(k) + catchup = $25,000 (increased from $24,500)
  
• Maximum 401(k)/Profit Sharing Plan contributions = $56,000 (increased from $55,000)
  
• ===> Maximum 401(k)/Profit Sharing Plan contributions including catchup = $62,000 (increased from $61,000)
  
• Maximum Compensation for Plan Years beginning in 2019 = $280,000 (increased from $275,000)
  

Please email me for a complimentary ticket to upcoming SHRM Hawaii Annual Conference on Leading Workplace Excellence on October 12, 2018.  This is better than a Coupon Code!