Which kind of retirement plan can a 75-employee for profit corporation establish?

Rationale

SIMPLE IRA is the kind of retirement plan a 75-employee for-profit corporation can establish.

A SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account) is designed specifically for small businesses and allows for employee contributions as well as employer matching, making it an ideal choice for a corporation with 75 employees.

A (Roth IRA.) YOUR ANSWER

A Roth IRA is an individual retirement account that allows individuals to contribute after-tax income. It is not a plan that an employer can establish for a business with employees; instead, it is designed for personal retirement savings and does not include employer contributions.

B (403(b).) YOUR ANSWER

A 403(b) plan is intended for employees of public schools and certain tax-exempt organizations. Since the question specifies a for-profit corporation, a 403(b) would not be applicable as it is not designed for profit-making entities.

C (SIMPLE IRA.) CORRECT

This plan is specifically tailored for small businesses, allowing both employee and employer contributions. It is an appropriate option for a corporation with 75 employees, providing a straightforward way to offer retirement benefits while being compliant with regulatory requirements.

D (Keogh.) YOUR ANSWER

A Keogh plan is primarily aimed at self-employed individuals and unincorporated businesses rather than corporations with employees. While it allows for higher contribution limits, it is not suitable for a for-profit corporation with multiple employees, making it an impractical choice in this context.

Conclusion

For a 75-employee for-profit corporation, establishing a SIMPLE IRA is the most viable option. This retirement plan accommodates small businesses by allowing contributions from both employees and employers, ensuring compliance with regulations while promoting employee retirement savings. Other options, such as Roth IRAs, 403(b) plans, and Keogh plans, do not fit the criteria or purposes suited for for-profit corporations with employees.

Which kind of retirement plan can a 75-employee for profit corporation establish?

SIMPLE IRA is the kind of retirement plan a 75-employee for-profit corporation can establish.

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