CFP Practice Test 11

Pablo Rivera — choosing a retirement plan

Pablo Rivera, 47, owns Rivera Grounds Care, Inc., an S corporation, and pays himself a W-2 salary of $150,000. The business has no retirement plan. Revenue swings with the weather, and in two of the last eight years the company had a loss.

Pablo's priorities, in order: (1) the freedom to contribute nothing in a bad year; (2) minimal administration and cost; and (3) at least $30,000 a year for himself in good years. He accepts that eligible employees must be covered. His crew is young and turnover is high; the four longest-serving employees are shown below. All four earn well above the SEP minimum compensation amount.