Bubba, 32, owns and operates a food shop in New Orleans, called Food Boys. It is a family business that sells authentic New Orleans food. Bubba wants to establish a retirement plan to save for his retirement and the retirement of his employees on a tax-deferred basis. He has recruited you to assist in making a plan selection. Bubba only wants to contribute in years that he makes a profit and does not want to incur much if anything on administrative expenses. Since the emplouyees of Ya Mama's are all family members, Bubba is happy to contribute on behalf of the employees when the restaurant is doing well. 1. Based on Bubba’s objectives, what type of retirement plan is most suited for his needs? 2. Why might you recommend that Bubba utilize a qualified profit-sharing plan with a CODA in lieu of the suggestion in question 1? (if you suggested a profit-sharing plan with a CODA for Q1, reconsider).
Bubba, 32, owns and operates a food shop in New Orleans, called Food Boys. It is a family business that sells authentic New Orleans food. Bubba wants to establish a retirement plan to save for his retirement and the retirement of his employees on a tax-deferred basis. He has recruited you to assist in making a plan selection. Bubba only wants to contribute in years that he makes a profit and does not want to incur much if anything on administrative expenses. Since the emplouyees of Ya Mama's are all family members, Bubba is happy to contribute on behalf of the employees when the restaurant is doing well.
1. Based on Bubba’s objectives, what type of retirement plan is most suited for his needs?
2. Why might you recommend that Bubba utilize a qualified profit-sharing plan with a CODA in lieu of the suggestion in question 1? (if you suggested a profit-sharing plan with a CODA for Q1, reconsider).
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