Business Owner Plan Retirement Small
BIZ owner plan retirement small preparation is even more critical for independent entrepreneurs since you do not have a corporation to support your pension plan or any 401K contributions to depend on. This article discusses some of the retirement plans offered for business owners and small businesses alike.
1. Solo 401K – Unlike the usual 401K, this biz owner plan retirement small option enables you to place the highest amount away while enjoying less reporting requirements and cost. This is appropriate for small businesses without employees and for entrepreneurs who have less than $220,000 of income per year. The maximum contribution is $44,000, yet you may still contribute up to 100% of the first $15,000 of self-employment revenue or compensation, as well as an additional amount max out of 25% of your income.
2. Roth IRA – This is the first biz owner plan retirement small choice you might want to consider if you are either initiating your savings or resuming to your retirement savings after commencing your business. You may contribute up to $4,000 and withdraw this anytime without any penalty or tax subtraction.
3. Simple IRA – This biz owner plan retirement small enables you to make contributions up to $10,000, which is tax-deductible, with an employer match of up to 3% and low annual fees. Your employees may even contribute and a company match is obligatory. This is recommended for solo-entrepreneurs who have low revenues, yet still want to provide more money for their retirement plans.
4. SEP IRA – If you have exceeded your Roth IRA and are willing to save more for your retirement, then this biz owner plan retirement small preparation enables you to make contributions of up to 20% of your self-employment revenues or 25% of your income for a maximum contribution of $44,000 every year. This has low maintenance fees and is tax-deductible. Even though employees cannot contribute to their very own SEP IRA, they may still contribute for you. This may work if you have many employees working for you and if you are trying to find a low-cost method of preparing for your employees’ and your own retirement.