2 retirement plans for veterinary hospitals
Gary I. Glassman, CPA
Gary I. Glassman, CPA, is a member of the Veterinary Economics Editorial Advisory Board who has worked exclusively with veterinarians for more than 20 years. He specializes in accounting, tax planning, and practice transitions and is a partner with Burzenski and Co. P.C. in East Haven, Conn.
The choice of your practice's retirement plan is a big deal not only for the staff, but for the employer as well, says Gary Glassman, CPA.
How you, as a practice owner or administrator, handle your staff's working conditions, the clinic culture and day-to-day operations of the hospital is one thing. How you handle your employees' money is another thing entirely-it can get personal. So, the decision about which retirement plan to offer is a critical one.
HospitalDesign360 conference and Fetch dvm360 speaker Gary Glassman, CPA, of Burzenski & Company, says there are two types of plans that work best for veterinary practices: the SIMPLE IRA plan (Savings Incentive Match PLan for Employees) and the 401(k). Both are deferral plans, which is to say, funded by money taken out of employees' paychecks. Glassman says 401(k) are most popular and well known, but that employers should investigate SIMPLE plans to maximize benefit and control cost.
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So, what's the difference? In a nutshell, SIMPLE plans have a lower maximum threshold for deferrals-$12,000 annually versus $18,000 with a 401(k). Additionally, the implementation of a 401(k) plan may require the inclusion of a greater number of employees, potentially raising the per-member cost for the employer.
Seem confusing? Glassman says don't go it alone.
"What I would really suggest is that employers go through a formal analysis with either a pension benefit specialist or a financial adviser to make sure that they are coming up with the right plan," he says.
Finally, he notes that 401(k) plans are not one-size-fits-all and that it's very important to really explore exactly what it is that your employees want from their retirement plan before making any decision.
Watch the video for more.
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