RETIREMENT PLAN SOLUTIONS FOR YOUR SMALL BUSINESS

1. RETIREMENT PLAN SOLUTIONS FOR YOUR SMALL BUSINESS Corporate retirement plan sounds a bogus and complex financial scheme many don’t want to dare; some others are of the opinion that they are for the blue chip companies and the ‘big guns’ in the corporate world. Well, that may be an assumption in ignorance as there are corporate retirement plan packages tailored at meeting the peculiarities of every scale of business. On this premise, every business whether large, medium or small stands to gain a lot from such financial schemes. Today, there are even more incentives for businesses of every size to embrace corporate retirement plans; all bottlenecks including administrative bureaucracy and cost that discouraged small businesses hitherto have been eliminated. Now, there are several options of a very easy and convenient corporate retirement plan for small businesses to choose from. Let’s focus on those tailored to meet the need of small businesses here. Corporate retirement plan designed for small businesses are of two streams. There is the scheme that just caters for the sole proprietor of a business alone and there is a comprehensive corporate retirement plan that covers the sole proprietorship and his employees. The former is called the Solo (k) or individual 401(k) plan while the latter is known as the Simplified Employee Pension (SEP IRA). The individual 401k plan amongst other plans that takes care of the retirement of the self-employed is so unique in its offering of allowing business owners make more contribution to the retirement fund at income levels where rules limited contributions in other identical retirement plan for the self-employed. This retirement plan makes provisions not just for the sole proprietor but also for their spouses; where there are partners in partnership with the sole proprietor; the plan covers them and their spouses too. However, since it is expected that just the sole proprietor runs the business; there are no provisions for employees under this. The sole proprietor who is the administrator of the plan determines the percentage of profit that would be committed as contribution to the fund. There are only specifications where an administrator contributed $5000 a year to the fund to make up for lost years. Where an administrator is not sure of how much to commit to the fund, going with standards like 25% of net profit or contributing in such a way total contributions is less than 100% of compensation. As to when to remit the contribution, conventionally, it is done when corporate tax returns are remitted and by the last day of the plan’s year there must have been a certainty as to paying the total compensation package to beneficiaries.

2. Corporate retirement plans that provide for sole proprietors and employees cover a broader spectrum of business ownership including partnerships and small businesses. It differs from a 401k though in mode of remission. Here, the business owner opens an IRA for every employee and makes contributions to the retirement fund from their taxable income. Comparatively, business owners can make more contributions under the individual solo 401k plans than the SEP IRA pension scheme. Having a retirement plan offers numerous advantages. The one that quickly catches the attention of most business owners is reduction in tax liability and of course you take employee retirement plan seriously, you are sure to attract the best of human capital. Articles Source: http://www.makemoneyonlinebuzz.com/2017/08/retirement-plan-solutions-for- your.html