As a small business owner, you are used to juggling many responsibilities so it is not a surprise that planning for your retirement is one of them. It can be a difficult task to undertake and it can result in peace of mind to have a financial advisor to help.
Many business owners say they want to set up a 401(K) plan because it is what they are most familiar with. However, after looking at their situation and the options available, a plan such as a SEP IRA, a SIMPLE IRA, or an individual 401(k) plan becomes a viable option.
Really, there are four types of retirement plans that small-business owners might consider:
- Simplified Employee Pension Plan (SEP IRA)
- Savings Incentive Match Plan for Employees (SIMPLE IRA)
- Self-Employed 401(k) plan
- 401(k) plan (better for larger companies given setup costs, administration, fiduciary responsibilities, etc.)
Each of these plans have different characteristics including the ability to cover employees, contribution limits, and administrative responsibility so understanding how your business is structured is important. While there are many benefits of setting up a retirement account for yourself and your business, your employees and family members will also benefit by having the opportunity to save for the future. A Capstone advisor is the person to help you determine what type of plan is best for you and your business.