A Better Way to Retirement
An Easier Way to Plan
Employees are often given little guidance when choosing how much to save for retirement and how to properly invest their retirement savings. flexComp simplifies the entire process by automatically determining each employee’s optimal savings rate and investment allocation – which is based on an algorithm that factors in the company’s retirement plan provisions, Social Security, IRS non-discrimination requirements, and market return forecasts.
So, all the employee has to do is choose the monthly income stream they would like to have during retirement, and flexComp sets everything else in motion to get them to that goal.
flexComp is designed for companies seeking the most flexible compensation and benefits offerings for employees. It allows employees to choose their balance between compensation and benefits – much like a Section 125 Plan (Cafeteria Plan). However, what makes flexComp different is its ability to factor retirement benefits into the flexible part of employees’ compensation packages.
Each employee is given the freedom to establish a compensation floor, while the employer establishes the ceiling. Everything in between is what employees use to purchase benefits – health, disability, and even retirement.
During the transition from pension plans to 401(k) plans back in the late 1970s, average American workers found themselves suddenly responsible for choosing their own retirement plan contribution rate. Americans are still faced with this same decision today. Although technology has increased access to retirement savings education and planning tools, few participants take advantage of these resources because of the complexity and time that’s required.
That’s where flexComp changes the game.
flexComp is a proactive planning tool that simplifies retirement planning into one simple question –
“What do you want your retirement income to look like?”
Once that goal is set, flexComp calculates what it will take to get there and sets everything into motion. Each year, progress reports are sent to employees so they can see progress towards their goal. The report also recommends corrective action, if needed. This type of retirement accountability is designed to keep employees informed about where their retirement savings behavior is leading them.
flexComp does more than just simplify the retirement planning process; it also delivers larger pre-tax contributions than traditional 401(k) and profit sharing plans. It does this by making use of all the employer and employee contribution types available under federal regulations, instead of only two or three used in most traditional plans. flexComp identifies the optimal contribution breakdown that will maximize pre-tax savings and allow the plan to pass non-discrimination testing.
Optimizing the contribution breakdown also eliminates corrective distribution problems that prevent business owners and other highly-compensated employees from being able to reach their retirement goals.
Optimized Tax Efficiency
Of course, when you make larger pre-tax retirement plan contributions, you’re decreasing your personal tax liability. However, flexComp doesn’t just deliver larger contributions; it also solves for the most tax-efficient way to classify those contributions while continuing to meet federal compliance standards. This process produces significant tax savings at the corporate and personal level.