3. Which kind of retirement plan can a 75-employee for profit corporation establish?
Answer: C
A 75-employee for profit corporation can establish a SIMPLE IRA.
A SIMPLE IRA is specifically designed for small businesses with 100 or fewer employees, making it a suitable option for a corporation with 75 employees.
A) Roth IRA.
A Roth IRA is an individual retirement account that allows individuals to contribute after-tax income, but it is not a retirement plan that a corporation can establish for its employees. Therefore, this option does not meet the criteria for the question.
B) 403(b).
A 403(b) plan is intended for tax-exempt organizations, such as schools and non-profits, rather than for-profit corporations. Consequently, this option is not applicable for a corporation with 75 employees.
C) SIMPLE IRA.
A SIMPLE IRA (Savings Incentive Match Plan for Employees) is designed for small businesses with 100 or fewer employees, making it an ideal retirement plan for a for-profit corporation with 75 employees. This plan allows both employee contributions and employer matching contributions, which can provide significant retirement savings benefits.
D) Keogh.
A Keogh plan is a type of retirement plan that is primarily aimed at self-employed individuals and unincorporated businesses. While it can be beneficial, it is not the most appropriate choice for a for-profit corporation with employees, thus making this option less suitable.
Conclusion
The SIMPLE IRA is the correct answer as it directly aligns with the needs of a for-profit corporation with 75 employees, providing a viable retirement plan option. Other options, such as the Roth IRA, 403(b), and Keogh, do not fit the context of a for-profit corporation, thereby failing to address the question's requirements.