Pension plans for Small business


On a recent business trip, I had a lively conversation with a small business owner who was on a mission to start a retirement plan. He wanted a good place to save some money tax deferred and to take care of his key employees. Great idea!! You know I’m a big fan of putting some money away for down the road.

Just get a 401(k) and go, right? Well, maybe. You may not know this, but there are quite a few different retirement options out there and many specifically designed for small businesses. Let’s go over the essentials so you too can make a great decision for your company.

Three options stand-out depending on what you want to accomplish with your plan and how much flexibility you need. These are: 401(k) plans, SEP IRAs and SIMPLE IRAs. Now for a quick quiz. Simply answer these questions and you’ll start honing in on the best fit for your business:

  1. Can I afford a match for my employees?
  2. Do I want to allow employees to contribute to the plan?
  3. If so, will some want to save more than $11, 500 a year?
  4. Do I need flexibility to access the funds prior to retirement for emergencies?
  5. How important are managing future taxes (a Roth option) versus my tax needs today?

Other things to consider include whether you want a profit sharing option or not, and do you have a business that experiences high employee turnover. If you expect high turnover, a vesting schedule for profit sharing and/or matching contributions can be a great way to go.

Are you ready to wade a little deeper into the retirement plan pool? I hope so. Here’s the plain English overview of each of the three plan types including a side-by-side comparison chart to help you sort it out.

The 401(k) Offers the Most Flexibility and High Contribution Limits

The traditional 401(k) is probably the most widely known retirement product on the market. It’s the fully loaded, high performance SUV of retirement plans. It’s generally defined as one that enables a business owner and employees to make consistent, tax-deferred contributions during the length of their careers.

But 401(k) plans offer a lot more versatility than that. 401(k)s not only offer higher contribution limits than most other plan options, but also offer more choices in design to manage business costs and program saving goals. You can choose to match or not, provide a vesting schedule, or enable penalty-free access to funds via a loan if an emergency arises. 401(k) plans also allow for “catch-up” contributions after reaching the age of 50. In 2011, employees can contribute up to $16, 500 if under 50 years of age, $22, 000 if over.

Wiley Beyond 401(k)s for Small Business Owners: A Practical Guide to Incentive, Deferred Compensation, and Retirement Plans
Book (Wiley)
2005-05-15 20:57:55 by puro

Pension plans were business contracts w employee

-s, walk away from that and it's a criminal matter except that Corporations have all the rights of individuals with none of the responsabilities: see this:
Quotes from The Dream Deferred Phillip Slater, 1991
"The private citizen mask is the one that corporations like best and employ most often, especially when the public expresses concern over some potentially nefarious activity,or one with a destructive social or enviromental impact: corporate leaders react as if the police were peering in their bedroom windows and talk of their privacy being invaded

2003-03-13 12:18:08 by INFOman

Info on self employed

NEW YORK (CBS.MW) - Wealthier Americans looking to boost their retirement plans and take heftier tax deductions for 2002 can act before year end to benefit from recent tax-law changes.
Small business owners and self-employed professionals such as doctors, lawyers and dentists who fund their own pensions can put more money into their plans. Since the contributions are tax deductible, they would lower their taxes.
For instance, a doctor earning $200,000 a year can put up to $130,287 into his plan at age 52 and deduct the entire amount, Nissenbaum said.
A hefty tax break
A defined benefit plan is a company retirement plan that specifies how much money is paid to retirees for life - usually a monthly sum

You might also like:

Best Retirement Plans for Small Business …
Best Retirement Plans for Small Business …
Retirement Plans for Your Small Business
Retirement Plans for Your Small Business
Qualified retirement plans for small …
Qualified retirement plans for small …
Small Business Pension Plans: How Can We Increase Worker Coverage?: Hearing Before the Subcommittee on Long-Term Growth and Debt Reduction of the Co
Book (Not Avail)
Solo(k)‪ Retirement Plan for Small …
Solo(k)‪ Retirement Plan for Small …
Financial Planner CT -Small Business …
Financial Planner CT -Small Business …
401k options for small business owners
401k options for small business owners
International Legal Pub. Co 100% Deductible : Tax Advantaged Pension & Retirement Plans For Small Business
Book (International Legal Pub. Co)
  • Used Book in Good Condition
Management study Process of institutional reform 12 to defined contribution from defined benefit to the best tax-qualified retirement pension plan abolition small business -! Funded retirement plan and benefit regulations (2005) ISBN: 4879139149 [Japanese Import]
Book (Management study)
Saskatchewan Pension Plan urges small businesses to help employees prepare for retirement.(Brief Article): An article from: SaskBusiness
Book (Sunrise Publishing Ltd.)

Related posts: