1. What is the tax treatment of a traditional IRA or a traditional 401(k) for employees? What is the tax treatment of a Roth IRA? How does that compare to a traditional IRA? If given the choice, which should you choose?
2. Jensen Robotics may choose to establish some sort of defined contribution plan at the company If it does not, its employees will be able to use IRAs or Roth IRAs. What are the pros and cons of both approaches?
3. Why might 401(k) non-discrimination rules pose a challenge to Jensen? What could Jensen do to address these challenges of the non-discrimination rules?
4. As a matter of public policy, why might SIMPLE IRA plans be exempt from non-discrimination testing?
5. For higher-income employers, which investments (stocks or bonds) should they put into tax-deferred accounts and which in their taxable portfolios?
6. What options would Jensen's employees have regarding their 401(k) accounts or SIMPLE IRA accounts when they retire or change jobs? Which options are best for employees?