Retirement Plans for the Self-Employed
With the day to day hustle of keeping a business profitable and running efficiently weighing heavily on many Entrepreneurs, planning for retirement can be an afterthought. Deciding which retirement option is best for your business takes a bit of research but here is a synopsis of your options:
1.) Roth IRA-Contributions are not tax deductible but retirement distributions are not taxed. Contribution limit: $5,500
2.) Traditional IRA-Contributions are tax deductible and retirement distributions are taxed. Contribution limit: $5,500
3.) SEP-IRA- (Self-Employed Retirement Plan) provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own retirement savings. Contributions are made to an Individual Retirement Account or Annuity (IRA) set up for each plan participant. Contribution limit: 25% of compensation or $55,000 whichever is lesser.
SEP IRAs seem to be an extremely viable option for Entrepreneurs looking to have a retirement plan that can grow with them as they add employees, increase revenue, and create the businesses of their dreams!