Retirement Plans for Small Businesses

If you own a small business you should consider setting up a retirement plan for yourself and your employees.  If you're an employee of a small business you should ask your employer about the possibility of setting up a retirement plan.





In short the benefits to the owners of the small business include:

• Any contributions employers make to retirement plans are deductible from their business income.


• Contributions made into the plan grow tax free.


• Their business may be able to get a tax credit or other incentive for starting the plan


• Having a retirement plan may make it easier to retain their employees

Benefits to the employees include:

• You don't have to pay taxes on the monies you put into the plan until you take the money back out


• You don't have to pay taxes on any earnings inside the plan until you take it out


• Once vested the money is yours, even if you leave this employer


• Contributions can be made through payroll deductions

In my next article I'll provide overviews of IRA based retirement plans.

Tax law can change daily, please talk to your tax adviser before making decisions that will affect your taxes.