Financial Planner

Answer: A - Profit sharing is a type of qualified plan that must be “substantial and recurring” with non-discriminatory allocation of contributions. Profits are not required in order to make contributions, forfeitures may be reallocated among the remaining participants, and there are no limits on how much can be invested in the sponsoring company’s stock. Profit sharing can be integrated with Social Security. However, profit sharing plans do not provide as large a contribution deduction as defined benefit plans.