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Older couple reviewing their financial plan

Your retirement plan should grow with you, while keeping your financial future on track.1

Connect with a Wealth Management Officer today.

Qualified Retirement Plans for First Midwest Business Clients

The best way for a business owner to grow their wealth other than to increase the value of their company is to reduce taxes. Contributing to a qualified retirement plan is one of the best options to accomplish this.

Establishing a qualified plan requires electing plan options to suit the objectives of the business owner. At First Midwest Wealth Management1 there are retirement plan experts available to help craft the best plan for each unique situation. This prevents clients from having to wade through the IRS and Department of Labor regulations. We not only provide advice but the necessary plan documents as well as ongoing plan consulting and plan amendments. This is a comprehensive retirement plan implementation and administration service that enables our clients to take maximum advantage of all available plan features.

A properly implemented qualified retirement plan can provide:

  • Lower income taxes
  • Creditor protection
  • Tax-free growth
  • Contribution flexibility
  • Tax-free income
  • Employee retention

Qualified plans may be established under IRC section 401k for a group of employees or for an individual (Solo 401(k)). There are some minor differences in the plan design options, but either plan can allow a business owner to contribute up to $56,000 ($62,000 over age 50) tax deferred in 2019. The IRS Limit in 2020 is $57,000 ($63,500 including catch-up contributions).2

First Midwest Bank Plan Service Advantages:

  • Keeps expenses exceptionally low
  • Prescreening of section 404c compliant investments
  • Help from experienced retirement plan specialists

First Midwest Bank is offering plans with no set-up or administration fees to help qualifying business clients maximize the advantages of these plans. These plans will be provided with investment options that have low fund expenses as well as no fund expenses. The solo 401k participants also have a range of managed diversified portfolios to choose from. With either plan, the cost to open and administer them has been eliminated. These plans do have asset fees based upon account values, but they are greatly reduced for our qualifying business clients. The election of an employer safe harbor matching contribution is also required for multiple participant plans. Contact a Financial Advisor to get started.

More information is available from a Wealth Management Retirement Plan Specialist. Here are some frequently asked questions and answers:

What is the deadline to make a contribution?

You can set up a 401(k) plan by December 31 and then make contributions for that tax year, all the way up to the tax filing deadline (plus extensions).

How do I get tax-free income from a retirement plan?

For small businesses and employees that are concerned about higher tax rates later, the Roth 401(k) enables participants to have their contributions taxed up-front, but withdrawals in retirement are tax-free, earnings and all.

Why is a Solo 401k considered flexible?

Using a Solo 401(k) for yourself, you can contribute as an employee and as an employer. So, you can cap your contributions as an employee and then have your business contribute up to 25 percent of your total earnings. You also don’t have to contribute a set amount to a Solo 401(k) each year, so you can contribute less if you have a tough year or more if you have a good year.2

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A couple enjoying retirement

Our Approach to Retirement Planning

In today’s rapidly evolving world, your Financial Consultant is with you the entire way to help you accomplish your financial goals, coordinate experts, and integrate products across our wealth management practice.

Here are a few reasons why our clients choose First Midwest Wealth Management:1

  • 75+ year track record of dedicated client service
  • 4th largest provider of Trust Services in Illinois
  • Over $15 billion in assets under advisement
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1 Wealth Management services are offered through First Midwest Bank. Most Wealth Management products are not FDIC insured. First Midwest Bank and its representatives do not provide legal or tax advice. Please consult an independent tax advisor or attorney for more complete information.
2 An employer’s deduction for contributions to a defined plan cannot be more than 25% of the compensation paid (or accrued) during the year to eligible employees participating in the plan (see Employer Deduction in IRS Pub 560), Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans).