BY ROBERT J. FENTON
Special to the Record-Eagle
---- — TRAVERSE CITY — Plan your work and work your plan.
This familiar phrase is often applied to our place of work, where we implement and execute our business plan and which influences our top and bottom lines. This adage, however, should also apply to your retirement plan. You live and breathe your business every day, but some point you will probably decide to retire. Thus it’s important to invest time now to begin preparing for what will hopefully be a comfortable retirement in the future.
Perhaps you are self-employed or own a small business. In any case, you generally have the option of establishing a retirement plan in which you and/or your employees may participate. Some of the advantages of retirement plans are they promote a disciplined approach to saving money for your retirement as well as that of your employees. They can also help you attract and retain a higher quality team, which is typically advantageous in growing your business. In the case of qualified plans and some non-qualified plans, a retirement plan can provide significant tax benefits for both the employer and employee. These benefits may include tax-deductible employer contributions and a tax deferral for employees until funds are distributed from the plan.
There are many types of retirement plans from which to choose and each has unique features that are appropriate for some employers but not others. It is important that you select a plan that best suits your needs and that of your business and employees. In addition to your own due diligence, you should speak with your CPA/accountant and financial advisor to help you determine what plan(s) may best fit the objectives of both you and your employees.
If you are a self-employed individual or small business owner, your needs also differ from those of larger employers. Accordingly, there are several types of retirement plans that are specifically designed for your circumstance, such as:
n Simplified Employee Pension/SEP Plan
n Simple IRA Plan
n Simple 401(k) Plan
n Individual 401(k) Plan
n Keogh Plan
As stated, there are many options to consider but putting a plan in place sooner rather than later can lead to an enjoyable and fulfilling retirement.
For further guidance on starting and growing your small business, contact Traverse City SCORE at 888-796-4913 or visit www.UpNorthScore.com to schedule a free and confidential appointment with an experienced SCORE mentor.
Robert J. Fenton is a volunteer SCORE mentor, wealth management specialist and financial advisor with Raymond James in Traverse City.