Hoosier Banker 61 MARY ALICE AVERY mavery@wilmingtontrust.com 302.636.6127 MINDY WALSER mwalser@wilmingtontrust.com 702.866.2203 Trustee Services for Senior and Subordinated Debt and Trust Preferred Securities Investment Subsidiaries and Holding Companies Custody Portfolio Accounting Investment Management ©2020 Wilmington Trust Corporation and its affiliates. All rights reserved. Wilmington Trust is a registered service mark. Wilmington Trust Corporation is a wholly owned subsidiary of M&T Bank Corporation (M&T). 43300-A 200218 VF ENTITY MANAGEMENT DELAWARE AND NEVADA EXPERIENCE financial information. They may not be able to drop into a branch office during regular business hours to make a transaction. Your clients may have chosen to become gig workers because they are entrepreneurs. Perhaps they are following their passion, or maybe they need the work flexibility for family or other personal reasons. They also could be bridging the gap between fulltime employment opportunities. Whatever the reasons, they have decided to take an unconventional career path, and a traditional savings approach may not suit their needs. Find ways to build digital connections. Connect with clients on social media. Feed them interesting topics that they may relate to and encourage them to act if they haven’t already developed a long-term savings plan. Help them discover what savings vehicles may be most appropriate for them at this stage in their lives. You are a trusted resource for your clients. When you build education into your website, this demonstrates your industry expertise. Retirement Savings Solutions That Offer Flexibility Many gig workers may not be familiar with retirement plan options, or they simply don’t know where to begin. They may need some guidance in navigating the savings products on the market to determine what fits best for their situation. The following retirement savings plans provide gig workers the opportunity to save in tax-advantaged accounts and give them the flexibility to decide how much they can afford to contribute each year. Individual(k) Plan Also known as an owner-only 401(k)plan, an Individual(k) plan is a low-cost 401(k) plan. It allows for larger contributions in good business years, including pretax and after-tax Roth deferrals. Total contributions (profit-sharing contributions, salary deferrals and after-tax contributions) for each individual cannot exceed the lesser of 100% of eligible compensation or $61,000 for 2022; individuals age 50 or older may increase this limit by an additional $6,500 as a catch-up salary deferral contribution. SEP Plan A simplified employee pension plan is less complicated than an Individual(k) plan, but offers a similar flexibility for larger contributions during good business years. SEP contributions are made to Traditional IRAs. Individuals may contribute up to the lesser of 25% of eligible compensation or $61,000 in 2022. SIMPLE IRAs SIMPLE IRA plans are another good option, but tend to be less flexible than other types of retirement plans. For example, a SIMPLE IRA plan may not be amended or terminated midyear. Individuals may defer up to $14,000 for 2022, plus an additional $3,000 if age 50 or older. A 3% matching contribution can also be made to individuals who make salary deferrals, or a (Continued on page 62.)
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