Your Small Business Retirement Plan

May 22, 2014 2:14 PM
Your Small Business Retirement Plan
" BOSTON (CBS) – If you are smart enough to start your own business, you should be smart enough to start a retirement plan as well! Here are some ideas to get your retirement savings started.

IRAs. You can contribute up to $5,500 this year and if you are over 50 you can use the catch-up provision and put away an additional $1,000.

Let’s say your net income for this year is $30,000. You can shelter up to $5,500 of it by contributing to an IRA.

SEP-IRAs: Simplified Employee Pension Plan uses an IRA format. You can contribute up to 25% of compensation up to $52,000 for this year. Now if you choose a SEP-IRA and have employees you will need to contribute to their SEP-IRAs also.

Let’s use $30,000 again and you would be able to contribute $7,500 to your SEP. Easy to set up with a mutual fund company or a brokerage company. Contributions can be made with your tax return next year.

SIMPLE-IRAs: Savings Incentive Match Plan for Employees was designed for small businesses with under 100 employees "

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