Each dentist has a type of program that works best for his or her retirement needs.
Your first step is to choose a program below, and then choose the funds that are available to you under each program.
Our “menu” of programs has been developed, tested and approved by our Third Party Administrator in order to maximize your retirement contribution. This benefit is free to our members and has a potential savings of thousands of dollars each year.
Qualified & Customized Programs:
- Profit Sharing Plan
- Age-weighted Profit Sharing Plan
- Simple 401(k) Plan
- Money Purchase Pension Plan
- New Comparability Profit Sharing Customized Plan
- Self-Trusted Customized Plan (Existing Plan)
- Standard 401(k) Customized Plan
- Defined Benefit Customized Plan (Outside Administrator Required)
IRA Programs:
Qualified & Customized Programs
Profit Sharing Plan
- Flexible plan allowing contributions up to 25% of salary or $45,000 in 2007.
- All eligible employees are covered.
- You decide each year how much money to contribute.
- You do not have to contribute each year.
- Contributions are discretionary.
Age-weighted Profit Sharing Plan
- Provides for higher contribution percentages for older participants and lower amounts for younger while keeping total contribution the same.
- Best when the dentist is about 5 years older than the next oldest participant.
- Allows for contributions of up to $45,000 for 2007 per individual.
SIMPLE 401(k) Plan
- Most of the contribution comes from deferred salary of employees.
- Dentist must match up to 3% of compensation.
- Maximum deferral is $10,500 in 2007, with possible $6,600 additional match.
- Catch up contributions allowed - $2,500 for 2007 (for those 50 and older).
- Avoids some of the testing required for the traditional 401(k) plan.
- One of the easiest plans to administer.
Money Purchase Pension Plan
- Has provisions similar to Profit Sharing Plan.
- Requires a predetermined and fixed contribution level.
- Limited appeal due to the recent increased limits for Profit Sharing Plans.
New Comparability Profit Sharing Plan
- Similar to Age-weighted Plan.
- Concept further extended by placing participants into classifications.
- Generally shifts contributions from younger participants to older participants.
- Allows for contributions of up to $45,000 for 2007.
Self-Trusteed Customized Plan (Existing Plan)
- Utilize the Guild Investment Portfolio while using your current Qualified Plan document from your own third party administrator.
- Consider utilizing our services for your document.
- CDG can sponsor all plans except the Defined Benefit Plan.
Standard 401(k)
- Provides another component to the Profit Sharing Plan that may benefit the participant seeking to maximize contributions.
- More details available as part of the tested plans.
- Usually used in conjunction with other types of plans to maximize contribution.
Defined Benefit Plan
- Allows up to $180,000 annual contributions.
- Must utilize an outside administrator for this type of plan.
- Guild investment option available.
- Third party administrator required.
IRA Programs
IRA Rollover
- Money from a qualified plan can be rolled over into this type of account for an individual with no taxable consequences.
IRA Transfer
- Accounts can be moved from one institution (bank) to another without any taxable consequences.
- Called and characterized as a trustee-to-trustee transfer.
IRA Traditional
- Regular IRAs are also called traditional IRAs.
- Regular IRAs allow you to make a tax-deferred yearly contribution of $4,000 for 2007.
- For persons who are age 50 or older, a special catch-up provision of the new tax law allows them to contribute an additional $1,000 in 2007.
- This account grows tax-deferred until you begin to take distributions, which you can do after you turn age 59½.
- Must meet AGI (Adjusted Gross Income) limits on compensation in order to take a deduction.
Roth IRA
- A Roth IRA is a tax-advantaged retirement account that allows you to make an after-tax contribution of $4,000 for 2007.
- If you keep a Roth IRA for at least five years and are at least age 59½ when you begin to withdraw from the account, the entire account can be distributed tax-free.
- A catch-up provision of the new law authorizes even higher limits for workers who are age 50 or older and allows for an additional $1,000 contribution in 2007.
- Must meet AGI (Adjusted Gross Income) limits on compensation in order to take a deduction.
SEP IRA
- A SEP plan is an employer-contribution retirement plan for self-employed persons or small businesses.
- SEP stands for Simplified Employee Pension.
- Employers establish a SEP plan by opening individual accounts called SEP-IRAs for each eligible employee.
- Only the employer can contribute the lesser amount of $45,000 for 2007, or 25% of compensation (compensation caps at $225,000 for 2007).
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