Super-Simplified 401(k) Plan

If you are a sole proprietor or solo business owner looking to build your retirement, you may not realize that there is a 401(k) program designed just for men and women like you. You may work full time for your own corporation, or perhaps you are a consultant or independent contractor earning self-employment income that is reported to the Internal Revenue Service on IRS Form 1099. In these and similar work situations, you are in charge of your own retirement planning. The Super-Simplified 401(k) plan may be the way for you to gain the benefits enjoyed by millions of rank-and-file employees, but designed specifically to fit the needs of an individual entrepreneur without employees.

The Super-Simplified 401(k) Plan is also appropriate for businesses that are run solely by multiple owners and their spouses. Corporations, LLCs, partnerships, sole proprietors and nonprofit entities may adopt the plan. If you do hire one or more common-law employees in the future, you may, at your option, continue the Super-Simplified 401(k), or consider alternative retirement program designs that may be better suited to your expanding business’s needs. If you opt to retain the Super-Simplified 401(k) plan, it would be advisable to retain a professional 401(k) plan administrator to handle the additional oversight that is mandated by government regulation whenever employees are covered by a qualified retirement plan.


• All profit sharing 401(k) contribu­tions are fully deductible on your corporate income tax return, or for self-employed individuals, 401(k) profit-sharing contributions are fully deductible on your personal income tax return.

• All interest, dividends and earnings grow tax-deferred.

• A wide range of investment options are available

• Make two types of discretionary contributions.

1. You decide each year what percentage of your salary or net profit you wish to add to your Super-Simplified 401(k) in the form of a profit-sharing contribution. This contribution can be as much as 25% of your first $245,000 of compensation (or if you are self-employed, 20% of your adjusted net business profits less 50% of your Social Security tax).

2. On top of this profit-sharing contribution, you may add salary deferral amounts. For 2010, you may defer an additional $16,500. And, if you are age 50 or over, another $5,500 catch-up contribution for a total deferral of $22,000.

• You decide which of two ways to contribute salary deferral amounts. You elect whether you want your salary deferral amounts to be considered before-tax or after-tax contributions. You can even have some of both.

1. Before-tax deferrals reduce your current income and therefore reduce your current personal income tax liability. Distributions will be taxable when withdrawn.

2. After-tax deferrals (also known as Roth 401(k) contributions) do not reduce your current income, but withdrawals of principal and accumulated earnings may be tax-free.

• Reduced administrative and reporting obligations. Maintaining a retirement plan does require your ongoing attention. The good news is that a Super Simplified 401(k) Plan with no employees requires less of it. There are no required governmental reports until your plan’s total assets are $250,000 or more. Then you will be able to file the streamlined Form 5500-EZ. You will want to have your accountant, tax advisor or other qualified plan administrator on your team handle this for you.

Mutual funds fluctuate in value and are subject to market risks and possible loss of investment. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus contains this and other information about the Fund. To obtain a free prospectus, please call Brandon Roper at 801-322-7614. Please read the prospectus carefully before investing.

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