A Profit-Sharing Plan is a Qualified Retirement Plan that allows you to make substantial contributions for yourself and any eligible employees you may have. This type of plan offers flexibility in choosing the percentage of income you may contribute each year and does not require an annual contribution. Profit-sharing plans also offer stricter eligibility requirements and delayed vesting that provides more control over employee participation and the cost of benefits provided. A profit-sharing plan generally requires more administration and paperwork than a SEP-IRA plan and may include yearly IRS filings.

A profit-sharing plan may be appropriate for businesses:

• With a self-employed owner
• With few or no employees
• Wanting to save on taxes while building for retirement
• Interested in rewarding long-term employees with a vesting schedule
• With variable profits and seeking flexibility in funding each year