Small Business Stratagies for Retirement

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Small Business Strategies For Retirement

At one time or another, most Americans have worried about their retirement years. Whether Social Security remains a reliable fixture is debatable, but even if those government checks keep coming, they probably won't cover all our bills. Social Security typically only provides for a small fraction of the average retiree's desired income.

As a small business owner, you can take steps to help ensure that you and your employees enjoy a more prosperous retirement. As a decision-maker, you can choose from a variety of tax-qualified retirement programs. The options do share a common link: they offer deductible contributions as well as tax-deferred compounding.

By setting up a retirement plan, you won't just be helping our your employees. Competing with huge corporations for the best workers is tough, but it can be easier if you offer an attractive retirement plan.

Here's a run-down of some of the major retirement plan choices.

SEP-IRA.

This is arguably the easiest plan to establish and maintain if you're self-employed or have few employees. With a SEP-IRA, small business owners can make an annual tax-deductible contribution, within certain limits, for themselves and eligible employees. With a SEP-IRA, there's no requirement to make a contribution each year.

KEOGH.

This retirement plan is also funded with employer contributions. A KEOGH permits a self-employed individual to contribute a certain percentage of his or her compensation each year up to a ceiling. The employer must contribute the same percentage for each employee as well. A KEOGH generally requires more paperwork and year-end reporting can be daunting.

SIMPLE.

The Savings Incentive Match Plan (SIMPLE) is designed for companies with 100 or fewer workers. With this retirement plan, you and your employees make annual contributions. Within limits, contributions on behalf of your employees are tax-deductible as a business expense.

401(k).

A 401(k) plan offers more flexibility than a SIMPLE plan, but it also generates higher costs and more paperwork. With a 401(k) plan, a business isn't obligated to make matching contributions into the participating workers' accounts. But 401(k) plans do require certain employee participation levels.

Regardless of which plan you prefer, it's wise to supplement a company retirement plan with your own personal investment portfolio. If you qualify, an Individual Retirement Account is a great way to save for retirement. If you meet the eligibility requirements, the deadline to contribute to a 1998 IRA is April 15, 1999.

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	Small Business Strategies For Retirement
	At one time or another, most Americans have worried about their retirement years. Whether Social Security remains a reliable fixture is debatable, but even if those government checks keep coming, they probably won't cover all our bills. Social Security typically only provides for a small fraction of the average retiree's desired income.
	As a small business owner, you can take steps to help ensure that you and your employees enjoy a more prosperous retirement. As a decision-maker, you can choose from a variety of tax-qualified retirement programs. The options do share a common link: they offer deductible contributions as well as tax-deferred compounding.
	By setting up a retirement plan, you won't just be helping our your employees. Competing with huge corporations for the best workers is tough, but it can be easier if you offer an attractive retirement plan.
	Here's a run-down of some of the major retirement plan choices.
	SEP-IRA. This is arguably the easiest plan to establish and maintain if you're self-employed or have few employees. With a SEP-IRA, small business owners can make an annual tax-deductible contribution, within certain limits, for themselves and eligible employees. With a SEP-IRA, there's no requirement to make a contribution each year.
	KEOGH. This retirement plan is also funded with employer contributions. A KEOGH permits a self-employed individual to contribute a certain percentage of his or her compensation each year up to a ceiling. The employer must contribute the same percentage for each employee as well. A KEOGH generally requires more paperwork and year-end reporting can be daunting.
	SIMPLE. The Savings Incentive Match Plan (SIMPLE) is designed for companies with 100 or fewer workers. With this retirement plan, you and your employees make annual contributions. Within limits, contributions on behalf of your employees are tax-deductible as a business expense.
	401(k). A 401(k) plan offers more flexibility than a SIMPLE plan, but it also generates higher costs and more paperwork. With a 401(k) plan, a business isn't obligated to make matching contributions into the participating workers' accounts. But 401(k) plans do require certain employee participation levels.
	Regardless of which plan you prefer, it's wise to supplement a company retirement plan with your own personal investment portfolio. If you qualify, an Individual Retirement Account is a great way to save for retirement. If you meet the eligibility requirements, the deadline to contribute to a 1998 IRA is April 15, 1999.