As a small business owner, everything falls on your shoulders including a retirement plan for your employees. Here are three options we see many business owners use along with some pros and cons to each option.
Simple IRAs are just that...simple. They are one of the easiest and most basic ways to execute an employer sponsored retirement plan. Business owners can have up to 100 employees. And Simple IRAs, generally, have low fees to operate. The downside is Simple IRAs don't offer much flexibility and customization options for your employees.
SEP stands for Simplified Employee Pension. All contributions for SEPs are made by the employer. You can’t exclude any employee - it’s all for one and one for all. However, as a business owner, you can put aside a lot of money with very little expense or paperwork.
401(k)s are much more flexible and offer many more saving options for you, the small business owner, as well as your employees. However, 401(k)s tend to be a bit costlier than a Simple IRA, for example. And 401(k)s are subject to non-discrimination income tests by the government.
If you have questions or need guidance with your small business, I'd be glad to help.
Email me at firstname.lastname@example.org or call 320.222.4236.