2017 IRS Limits for Popular Pharmacy Retirement Plans
Now that we are well into the start of a new year, it is always nice to take a moment to review government regulation changes. The most popular retirement plans for independent pharmacies across the nation are 401(k)’s and various IRA’s, and the following are the updated limits that one can contribute and defer into these plans for the 2017 calendar year.
- Individual IRA
- $5500 contribution annually per individuals under 50 years of age
- An additional $1000 annually can be contributed after age 50
- Traditional pre-tax and Roth (after-tax) IRA’s are available
- Roth IRA’s are not permitted for individuals whose income exceed $133,000 (or $196,000 for married filers)
- SIMPLE IRA
- $12,500 contribution/deferral annually per individuals under 50 years of age
- An additional $3000 annually can be contributed after age 50
- Traditional pre-tax contributions only
- Employer has option to match contributions
- SEP IRA
- 25% of total compensation or $54,000 (lesser of the two) annually
- Equal percentage must be paid to all employees
- Discretional from year to year
- 401(k)
- $18000 contribution/deferral annually per individual under 50 years of age
- An additional $6000 annually can be contributed after age 50
- Traditional pre-tax and Roth (after-tax) contributions/deferrals are available
- Employer has option to match contributions
- 401(k) with profit sharing
- $54,000 annually per individual under 50 years of age
- Includes deferrals, match, and profit sharing contribution
- An additional $6000 annually can be contributed after age 50
- Profit Sharing is discretional from year to year
- $54,000 annually per individual under 50 years of age
Understanding the pros and cons of these plans are critical. Having the right plan in place provides pharmacy owners the ability take advantage of tax saving and to reach their personal goals for retirement, while improving their ability to attract, retain, and reward their most valuable employees.
At Pharmacy401k we can customize a plan to meet pharmacy owners’ goals, needs, and objectives. Contact tyler@waypointus.com for a complimentary workshop or more information.