There are simple ways to provide your work force with retirement benefits.

Whether you run a corner store or a larger company, employees expect benefits that provide for their long-term financial security. Smaller businesses often can't afford to offer traditional 401(k) plans. But there are two other retirement savings options that are easier to set up and administer.

At Starion Bank, we can explain the details of Simplified Employee Pensions (SEP) and SIMPLE IRAs, and help you decide which one would be the most cost-effective for you and the most attractive for your work force.

Simplified Employee Pension

  • Often used by very small businesses, including those where the owner is the only employee
  • Owners can contribute a maximum of 25 percent of the employee’s income to the retirement account, or $56,000, whichever amount is lower
  • Otherwise, SEPs work much like Traditional IRAs
  • Annual contributions can result in tax deductions
  • Savings and dividends grow tax-free
  • Penalty-free withdrawals can begin any time after age 59 1/2
  • Individuals must begin making withdrawals by age 70 1/2
  • Consult your financial advisor for other tax regulations and benefits  

Simple IRAs

  • Business owners with up to 100 employees may set up a Savings Incentive Match Plan for Employees, or SIMPLE IRA
  • As with a 401(k), eligible employees may invest a portion of their pretax salary into an account and receive employer contributions
  • Maximum employee contributions are $13,000 per year
  • Employers are allowed a tax deduction for contributions made to the SIMPLE
  • Funds in SIMPLE accounts grow tax-free
  • Individuals may make penalty-free withdrawals at age 59 1/2, as long as their account has been open for at least two years

Starion Bank is a full-service financial institution with branches in North Dakota and Wisconsin.

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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Starion Bank and Starion Investment Services are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using the name Starion Investment Services, and may also be employees of Starion Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of Starion Bank or Starion Bank Investment Services. Securities and insurance offered through LPL or its affiliates are: