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Advisors of Horizon are Registered Representatives of Cetera Advisors a broker/dealer and Registered Investment Adviser.

Feb 15, 2018

The Real Deal About Retirement Plans



With Melissa Terito, CPA



In the 8th episode of the Confident Wealth Podcast, Bill Bush and Pete Bush talk with Melissa Terito, a partner and CPA at the accounting and business advisement firm Faulk & Winkler. She oversees their third party administrative practice (TPA) – branded as Sentinel Pension & Payroll. They share valuable information about the benefits that business owners have in setting up retirement plans for their employees. They also dispel a few misconceptions and assumptions that have been applied to retirement plans as well.


Time Stamped Show Notes:

  • 00:35 – Bill Bush and Pete Bush introduce Melissa Terito and she shares her professional life.   
  • 01:33  – Businesses establish retirements plans because their employees are asking for this service and it makes for a great tax deduction. 
  • 03:15 – Melissa will run a contribution projection so that the business owner can see how much their new retirement plan will cost them and save them.
  • 03:31 – Faulk & Winkler offers multiple retirement plans that include medical groups and a 2000-particpant union plan.
  • 04:20 – Melissa does consulting on simple IRAs,
  • 05:00 – Advantages to the employee for participating in retirement plans: it is easy, it is tax deductible, it grows tax deferred, and it gives them a knowledgeable advisor.
  • 07:44 –  The profit sharing contribution doesn’t need to be funded until the company files their tax return.
  • 09:16 – The new plan tax credit can offset some start-up costs.
  • 10:18 – The biggest problems that Melissa sees includes people not following the retirement plan document and assuming that part-time employees can’t participate in a 401K plan.
  • 12:37 – Faulk & Winkler educates their customers on an ongoing basis.
  • 13:12 – Full-time employees that drop down to part-time employees can’t be kicked out of their retirement plan.
  • 13:57 – Options that clients need to make decisions on include: eligibility and do you want to be a safe-harbor plan.
  • 16:44 – Trends that Melissa sees in terms of changing plans is making it possible to do during every pay roll period.
  • 18:04 – Steps that a plan sponsor can make in giving themselves confidence that the plan is running smoothly for them: check that they have a fiduciary folder, discussion with an advisor, and 401K vs. Roth IRA.
  • 20:50 – The closing credits


3 Key Points:

  1. Retirement plans offer advantages to employees such as being easy to set up, being tax deductible, growing tax deferred, and providing knowledgeable advisement.
  2. The profit sharing contribution is one of the few accrued deductions that a company can take on their tax return.
  3. Full-time employees that become part-time employees can’t be pushed out of their retirement plan.


Tweetable Quotes:

-    “Expensive is relative…there are fees with setting up anything.”  – Melissa Terito.

-    “If your business gets audited, there is a chance that they are going to take a look at the simple IRA at some point.” – Melissa Terito

-    “A lot of people don’t think that part-time employees can participate in a 401K plan.”  – Melissa Terito.


Resources Mentioned: