Plans for Small Businesses

Marketing Plans for Small Businesses – Why These Are Important

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.

2008-10-07 13:02:28 by -

Obama's specific plans for small business

* Provide Tax Relief for Small Businesses and Start Up Companies: Barack Obama and Joe Biden will eliminate all capital gains taxes on start-up and small businesses to encourage innovation and job creation. Obama and Biden will also support small business owners by providing a $500 “Making Work Pay” tax credit to almost every worker in America. Self-employed small business owners pay both the employee and the employer side of the payroll tax, and this measure will reduce the burdens of this double taxation.
* Create a National Network of Public-Private Business Incubators: Barack Obama and Joe Biden will support entrepreneurship and spur job growth by...

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