Small Business Retirement Plans
Written by Retirement Writer on September 11th, 2008Going from being self employed to owning a small business can happen in the blink of an eye. As your business continues to grow, you might find that you need a few more people around to help with the different aspects of the business. Now it’s time to start thinking about incorporating Small Business Retirement Plans.
The size of your business and the number of people you employ will determine what type of retirement plan to look into. Here are a couple of options you might consider. These are designed for business owners who only have a handful of employees on their payroll.
The first one is called an SEP (Simplified Employee Pension) IRA. This option is designed for the small business owner who has 10 or less employees. This is one of the easiest plans to put into action and there are no employee filing requirements. All contributions are made by the employer, but don’t have to be done every year. However, you can only contribute 20% of net earnings.
The other option is called a Simple IRA. This plan is set up so that an employee can contribute to their plan, and the employer can contribute 3% of the employees contribution dollar for dollar. Any documents you need for this option can be found at any bank or other financial institution. The down side is that even if an employee does not make a contribution for that year, the employer still must contribute 2% of that person’s salary.
Talk to your financial adviser as to which Small Business Retirement Plan is right for you. They can tell you how to set up the plans, how to talk to your employees about the plans, and offer any other information you may need.
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