Which Qualified Retirement Plans Should You Choose?For the small business owner, there are many different things to consider, including competition, cash flow, loyalty of customers, and many more. Most small business owners work more than the typical forty hours a week, so you may not have even had any time to consider setting up a retirement plan for your employees and for you. However, it is important that you take the time to start thinking about retirement plans for your company. You can find various qualified retirement plans to consider, but two of the most popular for small businesses are the Simple IRA and Harbor 401k retirement plans. When you are trying to figure out which of these two qualified retirement plans to use, the question you are going to need to consider is which one will be the best for your business. Both the Simple IRA and the Harbor 401k plans have some similar benefits, including tax deferred earnings and tax deductible contributions by the employer. They, however, have some key differences that you need to consider before making a choice between one of these two retirement plans. The Simple IRA is one of many qualified retirement plans available for small businesses. As the name suggests, this IRA is simple to set up and it is also both simple and inexpensive for you to manage as a business owner, as well. A Simple IRA allows you to either match employee contributions up to 3% of their annual salary, or if employees do not choose to contribute themselves, the plan requires you contribute up to 2% of their annual salary. Of course, you may not like contributing to the plan if your employees do not. However, if you are matching their contributions, in 2 out of 5 years you can lower your contribution by 1%, which can mean a cash saving for your business. Safe Harbor 401k qualified retirement plans are a bit different from Simple IRAs. The Safe Harbor 401k plan is a great idea for many small businesses because it offers many of the great benefits that a traditional 401k offers. However, they are much simpler to set up and do not require the fairness testing. One of the great benefits of the Safe Harbor 401k is that you only have to contribute up to the employer contribution limits of $14,000, no matter how much money your employees put into this account. Both the Simple IRA and the Safe Harbor 401k qualified retirement plans have a great deal to offer small business owners. If you have not already been thinking about setting up a retirement plan, now is the time to do so. Consider the qualified retirement plans available to you and then decide based on which one will be the best fit for your business. Simple Ira >> Privacy Policy >> Terms Of Use >> Disclaimer >> About Us >> Contact Us |