If you have a small business, you’re probably busy trying to grow your investment or just survive until the economy stabilizes. Issues like hiring new employees and putting together guidelines for retirement savings may be on the back burner if they’re on the stove at all. The fact is that many small businesses revolve around an undersized staff or a single individual — you. You’re the brain trust of the organization and often the most productive member of the team. You may think you can’t even afford to get sick, much less take a vacation or retire.

Retirement Planning and Your Small Business

Retirement planning may not be on your short list of things to take care of right now. The big snag is usually capital for funding a plan, and sometimes may be in taking the time to research the available options. Here’s the harsh reality, though: Small businesses are usually cash strapped and run by hardworking individuals who are trying to stretch a 24 hour day into 30 hours or more. If retirement isn’t on the list now, it may never become a priority.

The U.S. Department of Labor projects that to maintain a comparable standard of living in retirement, Americans will need as much as 90 percent of their annual preretirement income. To achieve that goal requires early and diligent planning. The retirement benefit strategies you begin bringing onboard now will help you in retirement and may attract better talent to your company in the future. That’s not all. There are tax advantages, too. An employer’s contributions are deductible, and plan money grows tax free. There may also be small business tax credits available to defray the startup costs of some plans.

The Department of Labor (DOL) has information to help you choose among some of the main plans and sort out the details with handy comparison charts. There are more options than you might think, including:

  • Payroll Deduction IRAs
  • SIMPLE IRA Plans
  • Profit Sharing Plans
  • Defined Benefit Plans (DB)
  • Simplified Employee Pension Plans (SEP)
  • 401(k) Plans
  • Automatic Enrollment 401(k) Plans
  • Safe Harbor 401(k) Plans

You can visit the DOL’s small business summary page at: Retirement Solutions for Your Small Business

It’s easy to postpone the decision to investigate retirement options until after that next big order, or next season, or after you reach some other future goal. Don’t wait. Check out the options today and begin planning for tomorrow.

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