July 1, 2011

Mr. Great Client
1222 Efficiency Lane
Benefits Town, NJ 10222
 

Dear Great:

I enjoyed our recent conversation regarding your plans to establish a qualified retirement plan. The purpose of this letter is to follow up from that discussion and begin the process of evaluating which plan is best for your company. My final recommendation will be based on the goals you set forth for establishing this plan.

Several types of qualified retirement plans are available to small business employers. Factors to consider in choosing a plan include (a) the amount and timing of required employer contributions, (b) the provision of benefits under the plan, and (c) the employer's desired tax deductions. Each employer has different goals to accomplish in choosing a retirement plan. The following four questions are a good place to start in determining your goals:

1. As the employer, are you willing to accept a mandatory funding requirement?

2. How much will your company contribute to the plan on a consistent basis?

3. Which employees are intended to benefit the most from the plan?

4. Is timing of the initial deductible contribution an important factor?

As you work through each of the preceding questions, keep in mind the following: your plans to expand your labor force, the long-term commitment of company funds for matching contributions or mandatory funding requirements, and anticipated changes in ownership or key employees. Please jot down your answers and any questions you may have as you consider these questions.

I will call you to set up an appointment for us to meet and review your goals in desiring to establish a retirement plan for your company. In the meantime, please call if have any questions regarding the content of this letter.

Very truly yours,

Nancy Good
Tax Partner