Small Business Retirement Planning

Written by Jacey Harmon
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Small business retirement planning may seem like a daunting task when you first think about it. Small business retirement planning involves determining your intended nest egg, how much you can afford to contribute, and what type of plan to use. One thing is for sure--an experienced financial advisor can make small business retirement planning a very simple task.

Plans to Consider with Small Business Retirement Planning

As an owner of a small business, it is important to plan for the future of your business as well as the future of your finances. Retirement planning involves determining your retirement nest egg goal. To arrive at this figure you must take into account your current salary, inflation rates, social security, taxes and annual returns. It might sound complicated at first but a financial calculator makes it very simple. Financial calculators can be found online or at your local investment advisor's office.

Desired funding of the retirement plan will determine what type of plan you want to use. Different small business retirement accounts have varying contribution limits. 401K plans have limits of $13,000 while SEP IRAs have contribution limits up to $40,000 in some instances. Affordability and flexibility of funding is another thing you will want to consider when deciding which type of plan to use.

The types of plans available for small business range from complicated to very simple. Keogh plans are the most complicated plans that a business can adopt. Other plans available are the 401K plans, traditional and individual, and SEP IRA plans. 403B plans are available for not-for-profit organizations such as hospitals and teaching institutions.


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Since you are 18 you have several optnios available for you.I would recommend that your earnings from the part time work be funneled into a Roth IRA account. Get an account with Scottrade or Edward Jones and they can take care of the details for you.Regardless you should be putting some of the money into Roth IRA.The rest of money that you wish to save should be put into a Growth Fund. I don't know your level of expertise in the stock market but if you know your way around then I would advise you to put money into ETF's or Index Funds that follow macro economic trends which you should be able to forecast with some reliability. For example, the stock market is going down big time and is in a major correction or bear stage, so you put your money into an index fund that tracks the price of gold or treasuries which are considered safe heaven during times of turmoil in the markets. Once the market swings around you shift your money into index funds that track the performance of the DJIA or the S P 500, except you might want to consider mutual funds.T.Rowe Price Jr.'s Aggressive Growth Funds are the best funds to invest money in when the stock market is doing well. I think you should pick up a book on asset management.If you want to play with stocks and micro-manage your finances then a great starter book to read would be:How to Make Money In Stocks by William O'Neil.If you want to invest for the long haul, any book on retirement will do.If you want to invest for the long haul, but know the specifics of what to invest, and how things work then you should buy:Security Analysis by Graham and Dodd.