​Retirement Planning


Plans for Small Businesses

Do you think you don't have enough employees to offer a retirement plan? Think again. Even one employee deserves an opportunity to prepare for the future. And, you can count on us to assist you every step of the way. We are committed to meeting the needs of the small- and medium-sized business owner, and can provide high-quality service to your business for years to come.

Types of Plans

There are as many types of retirement plans as there are reasons for establishing a plan. Selecting the right one for you and your business can be difficult. We are ready to work with you and your financial professional to evaluate your company's retirement plan needs.


Under a Simplified Employee Pension (SEP) plan, you make contributions to IRAs established and maintained for each eligible employee on a nondiscriminatory basis. All employers are eligible to establish this type of plan.


Under a Savings Incentive Match Plan for Employees (SIMPLE) IRA, eligible employees may make deferrals to SIMPLE IRAs through salary reduction agreements. Employer contributions are required. Only employers with no more than 100 eligible employees and no other qualified plan may establish a SIMPLE IRA.


A 401(k) is a profit-sharing plan with an added cash or deferred arrangement that permits employee deferrals through salary-reduction agreements. In addition, a 401(k) plan may provide for employer-matching contributions. Your employer profit-sharing contributions, if any, are subject to normal rules. All employers except state and local government agencies are eligible to establish a 401(k) plan.

Profit Sharing

A profit-sharing plan allows employers to make discretionary contributions. These contributions may be, but are not required to be, based on profits. All employers are eligible to establish this type of plan.

Defined Benefit

A defined benefit pension plan provides a participant with a specified benefit at retirement, with employer contributions actuarially determined to provide future benefits. All employers are eligible to establish this type of plan.

What to Consider

There are some decisions you'll need to make to put your plan in place, and certain things you will need to consider when choosing an appropriate retirement plan for your business.

  • Will you match employee contributions?
  • How long do employees need to be with your company to be vested in contributions you make on their behalf?
  • How will you administer the plan?

We can assist you with these questions and more.

Cost to Business

The cost of offering a retirement plan will depend on the type of plan you choose. Some plans require you to contribute on behalf of an employee and others don't require it, but have the option of discretionary employer contributions. Employer contributions can be a great tool for attracting and retaining qualified employees. You'll also need to consider the costs of administering a retirement plan, such as using a third-party administrator or the staff time it would take to administer it yourself.

Limits on Contributions

Each year the IRS sets limits for each type of plan for the amount that can be contributed. The limits are set to increase based on inflation in the coming years. Your insurance professional will have the most up-to-date information to share with you.

Tax Law

There are some tax implications for your business and for your employees. The type of plan you choose and the kinds of contributions you make on behalf of your employees will determine what kind of tax benefits your business could receive. On the employee level, it is important to remember that a qualified plan allows contributions to grow tax deferred. That means taxes will not be due on any of the contributions until a participant receives a distribution. All distributions are subject to ordinary income tax, and there may be an additional 10% penalty tax if taken before age 59½. Consult your tax professional for full details.


Depending on the type of plan you choose, loans may be made available to participants, allowing them to access part of what they have contributed prior to retirement. Any time a loan is issued, the participant's contract value is used as collateral for the loan. Participants should carefully consider the impact of a loan on their retirement account and consult their tax professional for more information.

We can help

To find out how to make the most of a retirement plan for your small business, contact us at 800 438 3398, ext. 17197, or send us an e-mail at DirectConnectTeam@gafri.com.

Note: The above information is not intended or written to be used as legal or tax advice. It was written solely to provide general information and support the sale of annuity products. A taxpayer cannot use it for the purposes of avoiding penalties that may be imposed under the tax laws. You should seek advice on legal or tax questions based on your particular circumstances from an independent attorney or tax advisor.

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