4 Retirement Plan Options for Small Businesses

When I started my online business in 2007, saving for retirement wasn't the first thing on my mind. I wasn't at all familiar with the retirement savings options available to the self-employed and small-business owners. But when my accountant told me I could save up to $50,000 in tax-deferred accounts, my ears perked up. As an employee, I resigned myself to the contribution limits imposed on IRA and 401(k) accounts. So the SEP IRA I opened in 2010 was an unforeseen advantage to starting a business.

If you're self-employed, you may be stymied by the retirement options available to you. If youâ re working for someone else, things are a bit easier because you can opt in to your employer's retirement savings plan. But as a business owner, you have the power to make more choices when it comes to your retirement savings. I'll help you sort through those options, including contribution limits and the pros and cons of each.


The Savings Incentive Match Plan for Employees (SIMPLE) IRA is suitable for many small businesses. If you have 100 or fewer employees who earned $5,000 or more on payroll in 2012, this plan could work for you. Pros of a SIMPLE IRA Cons of a SIMPLE IRA


The Simplified Employee Pension is as easy to work with as a SIMPLE IRA, but it could cost your business a lot more if you have more than one or two employees. In my case, I donâ t have any employees, so the SEP IRA was ideal. Pros of a SEP IRA
By Rob Berger
Rob Berger
Rob Berger is an attorney in Washington, D.C. and the founder of the popular personal finance blog, the Dough Roller. Follow Rob Berger on Google+.

Copyrighted 2020. Content published with author's permission.

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