How to Build a Small-Business Nest Egg
By Kelly Greene
When you start your own business, you already have so many things to figure out – marketing, websites, customers, when you’re actually do the work while doing all that other stuff.
Amid all that, it might be tough to find the time to weigh all the options for setting up a retirement plan. Fortunately, Denise Appleby, a retirement consultant in Atlanta, has done the legwork for you. To get a good understanding of the different types of plans that small-business owners can use, you may want to check out the handy explainer chart she has assembled.
She plainly lays out the similarities and differences between SEP IRAs, Simple IRAs, Simple 401(k)s, Solo-ks, traditional 401(k)s, money-purchase plans, profit-sharing plans and defined-benefit plans.
One of the most useful things to know: You can save dramatically different amounts in different types of plans – up to $50,000 in some, compared with $11,500, plus a 3% employer match, in others. Some allow salary deferral; others do not. They may or may not be tax-deductible and have different limits for those deductions as well.
Self-employed readers and small-business owners: Are you investing for retirement through your business? What’s your strategy?