Think your business is too small to have a retirement savings plan? That you’ll be tied down to specific contributions or a limited range of investments? Concerned you can’t cover the fees for a self-employed retirement plan? Stop worrying. Start saving.
Self-directed IRAs for small business owners have many advantages to allay your concerns.
- Size doesn’t matter.
There are tax-advantaged retirement plans for small businesses of all shapes and sizes. The assets in all of these plans grow tax-deferred and are deductible in an employer’s tax return.
- SEP IRAs (Simplified Employee Pension Plan) are open to every small business owner, those who work alone and those with employees.
- SIMPLE IRAs (Savings Incentive Match Plan for Employees) are available to employers of up to 100 people.
- Individual 401(k) plans are available to business owners with no employees aside from their spouse, partner(s) or other owners.
- You are in control.
Choosing a self-directed employer-sponsored plan lets you invest in a wide range of assets, not just stocks and bonds. You are in control of what you invest in, from real estate to precious metals and other alternative assets. Performing proper due diligence before entering into any investment is your responsibility, as is seeking out any guidance from a financial adviser.
- Contributions are up to you.
Each plan has different contribution requirements and limits.
- SEP IRA contributions are made at the employer’s discretion; making a contribution one year does not require you to make the same contribution every year.
- SIMPLE IRAs require an employer contribution. You may choose to match your employees’ contribution or make an across-the-board contribution based on your employees’ compensation instead of matching.
- Individual 401(k) contributions are made at your discretion; you can even suspend contributions in any given year.
- Retirement savings plans are less of a hassle.
For an annual fee, most administrators will handle all accounting for your self-directed retirement plan and submit most required government reporting to the IRS. You won’t incur additional management or custodian fees.
- Retirement savings plans are a valuable tax-planning tool.
This is true for you and for your employees. The limits to these plans are much higher than a Traditional or Roth IRA. See chart of the updated limits for this year.
- SEP IRA contributions to a Traditional IRA are tax-deductible to the employer.
- SIMPLE IRA contributions made by you and your employees are made with pre-tax dollars, reducing your taxable income.
- Individual 401(k) contributions may be contributed pre-tax therefore they will be tax-deductible when made into the plan or if contributed after-tax, grow tax-deferred and potentially distributed tax-free if contributed to a Roth account in the same plan.
- All retirement plan providers are not the same.
When you open a self-directed retirement savings account with The Entrust Group, you:
- Receive personal service from one of our knowledgeable staff. You will come to recognize the voice of your own contact, who will be with you throughout the process.
- Have access to educational materials and resources in Entrust’s Learning Center where you can find articles, upcoming webinars, plan guides, and more.
- Will be provided with innovative services such as The Entrust Group myDirection Visa® Card to expedite your investment transactions and our online portal to conveniently access and manage your accounts.
There’s no need to be concerned about being able to take care of your business now and plan for your financial future. While you have many options for retirement savings plans, self-direction gives you freedom to choose from alternative assets and control over the plan. Envision the kind of retirement you’ve always dreamed about, and we can help you carry out that vision. Our report, Control Your Retirement Savings the Easy, Affordable Way: Tax-Advantage Plans for Small Business Owners, can help you begin to determine which plan could be right for your business.