Retirement Planning in Plain English

Kleinrock Publishing (, 2005

Print, CD, and online editions; $65; ISBN: 1-933221-16-X

Reviewed by William Bregman, CPA/PFS, CFP

E-mail Story
Print Story
SEPTEMBER 2005 - As the title declares, Kleinrock’s Retirement Planning in Plain English is a guide written in plain English that attempts to provide quick answers to often complex questions in an area that is difficult for many CPAs. Just before I started reading the book, a client called about taking funds out of his IRA to buy a new house. Answer time with the guide: two minutes. The next question was whether the money in the IRA, which came from a qualified plan, could be rolled over into a new employer’s plan and then taken out as a loan. The answer time was the same two minutes. Throughout, the guide has enough depth for a CPA to use it as a sole source for the majority of retirement- planning questions.

The first part of the guide is a short introduction to the topic. The second part, dealing with employer-sponsored plans, begins with a general discussion of deferred compensation, and discusses the merits of qualified and nonqualified plans before moving into defined-benefit and annuity plans. In addition to discussing the basic workings of such plans, it covers collectively bargained and multiemployer plans. It then talks of plan qualification requirements, minimum funding standards, and actuarial issues. Money purchase and target benefit plans are then discussed, followed by profit sharing, stock bonuses, employee stock option plans (ESOP), and 401(k) plans.

The guide then moves on to qualified plan requirements. It notes that the plan must be written and created by the employer as a permanent arrangement; it outlines formulas for allocating contributions, trust requirements, exclusive benefits, and communication-to-employees rules; and it presents nondiscrimination requirements, participation, coverage, vesting, forfeiture, and top-heavy rules. The guide gives detailed but generally easy-to-follow examples. It also provides compliance tips, observations, cautions, and practice tips; it covers ERISA rules; it carefully details qualified plan contribution and distribution rules. Finally, nonqualified plans are mentioned. It discusses employer withholding requirements and the new IRC section 409(A) rules.

The third part of the guide deals with small-employer plans. In this section, the savings incentive match plan for employees (Simple IRA) has more pages devoted to it than to simplified employee pension (SEP) plans or to section 403(b) tax-sheltered annuities. The guide points out that, under a Simple IRA, a contribution is required even if the business is not profitable. A more traditional plan, such as a Keogh, allows for much higher annual contributions, and a 401(k) Simple arrangement is also permitted. While many CPAs are familiar with the requirements for SEP plans, which must be in the form of an IRA or an individual retirement annuity, the guide covers participation requirements, nondiscrimination rules, and vesting and withdrawal requirements. It then discusses the maximum permitted contributions ($42,000 for 2005) and tax treatment of employers and employees.

The fourth part talks about retirement plans for individuals, and unlike many retirement guides, it deals with Social Security. It discusses issues affecting U.S. citizens residing abroad, as well as the treatment of nonresident aliens. The guide goes on to discuss traditional IRAs, Roth IRAs, and Keogh plans. It then covers contribution limits, rollovers, and distributions, using many examples. The guide concludes with a section on planning and practice. It gives numerous tables and charts, checklists, worksheets, and sample elections.

William Bregman, CPA/PFS, CFP, has a tax and financial planning practice in New York City. He is a member of The CPA Journal Editorial Board and former chair of the Personal Financial Planning Committee.




















The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

©2009 The New York State Society of CPAs. Legal Notices