IRAs for Business Owners : Me, My Money and I, Accounting and Bookkeeping

The personality traits that make entrepreneurs successful - self-motivated, risk taking, confident, focused - suggest that business owners may be more inclined than most people to put all their eggs in one basket - their business. Entrepreneurs often don't see themselves wanting to retire. The day-to-day press of running a business combined with entrepreneur personality traits may make retirement planning move to the back of the line in a business owner's priorities.
But consider this:

Relying solely on the proceeds from the sale of a business is a very risky strategy for retirement planning. The business cycle is an unpredictable thing. Your business is worth what someone is willing to pay for it when you sell it. Your health or other factors may take away flexibility of when you sell your company. Diversify your portfolio of retirement assets by saving for retirement separate from your business.

Quality employees consistently rate a retirement plan as one of the most important benefits they look for in assessing a potential employer or deciding to remain with a current employer.

The time value of money - compounding of earnings - means that starting a retirement savings program early makes preparation for the "golden years" easier. On the flip side, delay makes carrying out a savings program for your retirement years that much harder.

Providing a retirement plan for employees can be a valuable business tool as well as a way to ensure the owner's financial security and that of their family. But what type of plan makes sense for you and your business?

The Director of Employee Plans at the IRS talks about Starting a SEP or SIMPLE IRA

IRA-funded retirement plan details are found here:

Simplified Employee Pension (SEP) Plans: Provide for employer contributions only.

Savings Incentive Match Plan for Employees (SIMPLE) IRA Plan: Employers and employees contribute to this type of plan.

Payroll Deduction IRA Plans: The simplest of all retirement plans but contribution limits are much lower.

SARSEP Plans: These are Simplified Employee Pension plans that allow salary reduction agreements

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