Also, Social Security is pushing back the age to receive full benefits to 67. The need for a regular retirement program is clear. The agency had closed out its defined benefit pension plan about a year ago, but owner Bill Garrity understands the need for diversification of retirement income sources. In our business we see a lot of older people who did not plan well for retirement because too many of their assets were concentrated in one place. We want to have as many retirement income options as possible.
Administrative costs are minimal.
The Simple IRA also has a small administrative cost. But the employee would be taxed on these distributions and the employer would pay FICA on them. As for the agency owners, they have the same tax-deferred savings opportunities as other employees. If two spouses were principals, that amount would double. That's not bad if the agent is already writing the property-casualty.