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FICA Alternative

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FICA Alternative

Employer FICA Alternative Retirement Program Saves You Money

Why pay FICA taxes if you don’t have to? You can save 6.2% of the total matching Social Security portion for your part-time,seasonal and temporary employee’s (PST) wages with a FICA Alternative Retirement Program under Internal Revenue Code 3121.

Instead of reducing the PST employee’s gross wage by the mandatory after-tax 6.2% and sending it to the federal government,you can establish a FICA Alternative Retirement Program that enables the employee to contribute 7.5% of gross wages to a FICA Alternative Retirement account on a “pre-tax”basis.The employees’take home pay does not change in any noticeable way.Their ultimate Social Security benefits are not affected in any negative way.

Program Advantages for Employers

  • Saves 6.2% of the matching Social Security portion of total PST payroll total PST payrollEasy implementation.
  • Limited payroll administration.
  • Web site access for payroll data transfers.
  • Employee brochures and annual statements.

Here is how 6.2% equals 7.5

Social SecurityFICA Alternative
Gross Monthly Wage
$1,000.00
$1,000.00
Less 7.50% pre-tax contribution
-0-
75.00
Taxable income
1,000.00
925.00
Less 15% Fed income tax
150.00
138.75
Less 5% State Income tax
50.00
46.25
Less 6.2% FICA/Social Security
62.00
– 0 –
Less 1.45% Medicare tax
14.50
14.50
Net paycheck
$723.50
$725.50

Program Advantages for Employees

Employees like the program because they know that under normal circumstances,they will not see their FICA dollars until they retire.With your help and the FICA Alternative Retirement Program,they gain more control over when and how they can use their money.Unlike Social Security,with the FICA Alternative program employee contributions and interest earnings are available:

  • upon termination of employment;
  • in the event of death or disability;or
  • at normal retirement age.

Contributions to FICA Alternative accounts are invested in a group annuity contract which provides guaranteed interest and principal.
Your employees deserve control over their hard earned retirement dollars.

Help them maximize the use of their benefits with a FICA Alternative Retirement Program.

Potential Employer Savings

Annual PST Payrol
Employer Savings
$25,000
$1,550
$75,000
$4,650
$150,000
$9,300
$250,000
$15,500
$750,00
$46,500
$1,500,00
$93,000
$2,500,00
$155,000
$5,000,00
$310,000

For more information Contact: Precision Retirement Group, Inc.
National: 800.238.9101
West Coast: 800.369.9461
East Coast: 888.458.3902

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