This is Key #5 of the Six Keys to Maximizing Wealth for Small Business Owners-Save for Retirement. In this article I’ll discuss the different types of retirement plans available to business owners. It’s critical to save for your own retirement. No one else will.
Offering competitive benefits are often the key to attracting and retaining good employees. As a business owner, you’ll want to develop a benefits strategy that fits your and your employees’ needs. This may include a workplace retirement plan.
Advisors often hear business owners say plans are too expensive or complex. A study by National Small Business United and Arthur Andersen revealed that only 28% of small and medium-sized businesses offer retirement plans to their full-time employees. The reality is that most business owners cannot afford not to establish a retirement plan. Even if you assume that you will easily sell your business and live off the proceeds when your retire, it is risky to assume that will work out.
The plan you choose will depend on several factors. As a business owner you will have to consider the number of employees you have and whether your want them to be able to contribute.You should also consider how long before your own retirement, your tax situation and your current retirement savings.
There are a wide variety of plans available to small business owners: 401(k) plans, profit-sharing, Simplified Employee Pension Plans (SEPs), Savings Incentive Match Plan for Employees (SIMPLE) are among them.
To find out more about the various retirement plans available to small business owners, download my eBook Six Keys to Maximizing Wealth for Small Business Owners today.