Retirement Archives
The most expensive and complicated retirement plan for the self-employed, the defined benefit plan is most appropriate for someone with a mountain of money to save for retirement.
Employers can save a maximum of $195,000 per year. But you need an actuary to determine the amount that can be contributed, which adds to the cost of the plan.
In contrast, the Solo-K, SEP and SIMPLE IRAs allow more flexibility by allowing employers to reduce contributions in a year with poor cash flow.
Better Retirement Life, business owner, cash flow, Effective Plan, expenses budget, expenses contributions, Luxury Lifestyle, money management, Pension Benefit, retirement plan, self-employed, tax-dodger
Similar to a 401(k) used at companies across the country, a Solo 401(k) lets small-business owners share the fun and benefits. The business must be very small, however, limited to the owners of the business and their spouses.
The Solo 401(k) allows business owners to put away more money than a SIMPLE or SEP IRA, and there is some flexibility when it comes to contributions. You can contribute more or less every year, but a maximum of $16,500 for 2009.
Business Contribution, business owner, Business Plan, comfortable retirement, employee compensation, Employer contribution, financial adviser, Financial Plan, profit sharing component, Property Owner, retirement plan, Small Business, tax-deductible
a.k.a. “Simplified Employee Pension plan”
It is as easy and low cost to set up and maintain as the SIMPLE IRA. But instead of the employee making contributions to the plan with a match from the employer, the employer makes the entire contribution.
Self-employed workers may find the SEP ideal due to its low setup and maintenance costs. Business owners can save quite a bit more in a SEP than the SIMPLE or other IRAs. For 2009, the contribution limit is 25 percent of net income up to $49,000.
business owner, Business Plan, contributions plan, Employee Pension Plan, Finance Management, pension contribution, profit margin, retirement plan, saving money, self-employed
a.k.a. “Savings Incentive Match Plan for Employees“
The plans are designed for small businesses with no more than 100 employees who earned $5,000 or more on the payroll for the previous calendar year. But some advisers and tax professionals think these plans are more suited for much smaller companies.
It’s easy and simple. Including instructions, the account application is about four pages to fill out, and you can do it in 10 minutes.
- Who can open one: Generally an employer with no more than 100 employees.
- Cost and complexity: Low.
- Employer contribution limit: 3 percent of employees’ pay, matching, or 2 percent non elective.
- Employee contribution limit: $11,500 for 2009.
- Annual reporting requirements: None.
business cost, Comfortable Retirement Life, Corporate Annual Report, Employee contribution, Employer contribution, finance consultant, Incentive Match Plan, Savings Management, small business owner, tax professional
Next year will be the retirement year for Uncle John. He’s been toiling in one Flint GM factory or another for 35-plus years, and he’s about done with it. Work— tinkering with cars, boats, and home remodeling tasks— can still give him a charge, but crawling out of bed every weekday morning at 5 to slap together torque converters wears on him. He’d rather spend time hunting and fishing, and also with his grand-kids.
John is pretty young for retirement. He’s in excellent shape— SAY NO TO Alcohol and Cigarettes and he’s able to carry his 150lb outboard trolling motor down a flight of stairs into his basement every winter’s eve for storage. He’s paid into the Social Security pensions system since he was a teenager, when payroll taxes were 6%. Most of that money went straight to retirees drawing direct benefits at the time. Today, payroll taxes are 12.4%, a partial reflection of a trust fund set up in 1983, so John’s kids and grand-kids, and nephews, wouldn’t have to worry about their Social Security later on. Just like John isn’t one to worry.
Americans business nature, Better Retirement Life, Business Culture, Economy Inflation, Extra Income, Financial Freedom, medical expenses, payroll taxes, Pension Plan, Retirement Life, Savings Management, Social Security, solvency crisis, Western Society
