Tags: Essay Cover Page TemplateContrast Essays About Two CitiesSample Business Plan For Daycare CenterCover Letter Sponsorship ManagerCreative Writing Masters DegreeMath Critical Thinking QuestionsPaper Research Materials IncArgumentative Essay PapersSwot Analysis Dissertation
If you’re currently running your own business but looking to expand, the SIMPLE IRA may be the account you need.With this type of account, you can continue investing even after you’ve hired an employee, but you have to match your employees’ contributions, up to 3 percent of their pay.
It works a lot like a Traditional 401(k), but your spouse can join the plan.
Acting as your own employee, you’re able to contribute as much as $19,000 to your individual 401(k), or $25,000 if you’re over age 50.
It’s an easy account to open and annual account fees are low or even non-existent.
The rules on contributions are also simple – you can invest as much as 25 percent of your net income up to a cap that changes periodically to keep up with inflation. Contributions are tax-deductible and the SEP IRA also offers some funding flexibility.
You may not even be able to envision yourself retiring. But it’s critical to have the right strategies in place for retirement.
After all, you don’t want to strike it rich with your startup and then have nothing to show for it when you reach 65.For the self-employed individual, these plans are relatively low cost and easy to administer.As a first step, you may want to consult with your financial advisor to determine which plan is right for you and your business.Here are the most popular retirement plans for small businesses, according to Jeff Cutter, CPA, PFS, a financial planner in Mansfield, Mass.For business owners who employ themselves, and possibly a spouse, the Individual 401(k) helps maximize retirement contributions.Because there’s no restriction on those contributions, you can make them when your business is doing extremely well to make up for the years when it was harder to make such large contributions.If you have a spouse in the plan, it’s possible for the two of you to double up on those contributions, including the higher limit for catch-up contributions if you’re both 50 or older. Decisions on health care plans, retirement plans and other benefits are often left solely to the owner.Offering a small business retirement plan to employees isn’t always on the radar.“This is important, because business owners are the least prepared of all people for retirement, even less so than their employees, according to studies.” Another advantage of offering a retirement plan is helping the owner attract, retain and motivate employees, Kalish says.Depending on your answers, a retirement specialist can steer you toward the appropriate small business retirement plan options.