Frequently Asked Questions:
OVERVIEW
General
What is inVesti?
InVesti is a financial software solutions platform, providing tech infrastructure to address the unique needs and requirements of today’s employee retirement and retention accounts. inVesti has cloud hosted plan setup and management services, offering enterprise scalability and cost-cutting implementation. Whether you are a Record Keeper, a Financial Advisor, or a Financial Services Provider, inVesti Solutions are built for you.
Is inVesti a Record Keeper?
Yes, and more! Record keeping is a core service at inVesti, and our record keeping solution can integrate with any payroll, custodian, CRM, or 3rd party service provider. Our forward-facing API suite and proprietary software tech stack is customizable and scalable.
Why do Financial Advisors work with inVesti?
At inVesti, we offer turnkey, online software (desktop and mobile) that makes onboarding and managing your clients’ 401(k)s, IRAs, HSAs, and other employee retention accounts more efficient and more personal, via our intuitive proprietary communication software. Simply put, Financial Advisors can spend more time creating and maintaining relationships and less time on administrative and technology hassles.
Why do employers use inVesti?
At inVesti, we offer a range of retirement and other accounts aimed at employee retention and legislative compliance. Our service includes expert, fiduciary financial advisory guidance and the online onboarding and administration makes it easy to attract and keep personnel.
Is inVesti a Robo-Advisor?
No. We offer an automatic investment feature as part of our solution, but we are not a Robo-Advisory. We believe that each customer has unique needs and objectives, so we offer customized services according to those needs.
What kind of customer service support does inVesti offer?
We have a full-time customer service staff, and you can schedule a customer service call between 9-5 Monday – Friday (CST). Or you can post your questions (here) on our message board.
The Product
How does the inVesti platform work?
inVesti offers tax-advantaged retirement plans, HSAs, and other savings vehicles as part of a software platform that connects the participant and their employer with fiduciary oversight and streamlined administration functions. The platform offers our partners the power to integrate with any payroll service, CRM, or 3rd party service provider. Our forward-facing API suite and proprietary software tech stack is customizable and scalable.
Definitions and Terms
What is a 401k Plan?
In the United States, a 401(k) plan is a tax-qualified, defined-contribution pension account defined in subsection 401(k) of the Internal Revenue Code. There are a few different variations of 401(k) plans such as ‘MEP’ that stands for Multiple Employer Plan. MEPs are defined in IRC 413(c) and are retirement plans that cover unrelated employers. inVesti offers both single employer and MEP plans.
What is an HSA?
A Health Savings Account (HSA) is a tax-advantaged medical savings account available to individuals who are enrolled in a high-deductible health plan (HDHP), are not on Medicare, and can’t be claimed as a dependent on someone else’s tax return. An HSA provides a tax-free way to pay for qualified medical expenses. Contributions are “pre-tax”, any earnings created by investing the cash balance in an HSA are tax deferred, and distributions for Qualified Medical Expenses (QMEs) are not taxed.
Unlike a Flexible Spending Account (FSA), HSA funds roll over and accumulate year to year if they are not distributed. And, unlike employer-owned Health Reimbursement Arrangements (HRAs), HSAs are owned and controlled by the individual account holder.
What is a SEP-IRA?
A SEP IRA (Simplified Employee Pension) is a plan that an employer (including self- employed individuals) can establish to create an easy method to contribute to their employees' retirement savings, as well as their own. A SEP IRA plan follows the same investment, distribution, and rollover rules as other IRAs and does not have the start-up and operating costs of a conventional retirement plan, such as a 401(k).
What is a SIMPLE-IRA?
A SIMPLE IRA (Savings Incentive Match Plan for Employees) is a retirement plan that may be established by employers with 100 or fewer employees. A SIMPLE IRA is ideally suited as a start-up retirement savings plan for small employers not currently sponsoring a retirement plan. The plan allows eligible employees to contribute part of their compensation to the plan, and employers may also make contributions. SIMPLE IRA plans do not have the start-up and operating costs of a conventional retirement plan such as a 401(k).
What is a Traditional IRA?
A Traditional IRA (Individual Retirement Arrangement) is a retirement account which allows individuals to direct pretax income toward investments that can grow tax- deferred. Contributions to a Traditional IRA are “pre-tax” (i.e., are tax deductible or have been not been taxed prior to entering the account), and, once inside the account, those contributions can be invested and generate earnings that are tax deferred, allowing the account value to grow faster. Distributions to the account holder from a Traditional IRA are taxed as regular income in the year of the distribution.
What is a Roth IRA?
A Roth IRA (Individual Retirement Arrangement) is a retirement account that, provided certain conditions are met, allows an individual to save money for retirement without having the investment earnings of that money to be taxed. Contributions to the Roth IRA are “post-tax” (i.e., have been taxed prior to entering the account), but, once inside the account, those contributions can be invested and generate earnings that may be later distributed to the account holder tax free.
What is the difference between an employer plan like a 401(k), SEP IRA, or SIMPLE IRA and an Individual plan like a Traditional or Roth IRA?
The core difference between an employer plan and an individual plan is that the individual plan, Traditional or Roth IRA, is established and controlled by the employee, whereas, an employer plan, such as a 401(k), is sponsored by and administered by the employer. With employer plans, the employer has the ability to contribute directly to the plan on behalf of the employee in addition to the employee’s contributions. Also, the annual contribution limits are significantly higher for employer plans when compared to an individual plan.