Attention Plan Sponsors:
Learn About Self-Employed Retirement Plan Options.
What Is a Self-Employed Retirement Plan?
We talk a lot about retirement savings [401k] plans for employees. We offer ideas for employers (Plan Sponsors regarding offering the best retirement savings plans for their employees. However, what can you do to save for retirement if you are self-employed?
Thankfully, there are many options for self-employed individuals. These individuals can save for retirement, even if they are self-employed only part-time. Read on to learn more about retirement plans for the self-employed.
What Is a Self-Employed Retirement Plan?
A self-employed retirement plan is a retirement plan that allows self-employed individuals an opportunity to save tax-deferred money for their retirement. These plans are known as the same names as employer-sponsored plans. In other words, self-employed individuals can use SEP IRA, SIMPLE 401(k), SIMPLE IRA, or self-employed 401(k) (also known as a solo 401(k) and individual 401(k) to save for retirement or even Defined Benefit Pension Plans.
What Are the Benefits of a Self-Employed Retirement Savings Plan?
Self-employed individuals do not have to wait to begin contributing to a retirement savings plan. Furthermore, they can be self-employed full- or part-time or part of a sole proprietorship or partnership with Schedule C income.
Another benefit is that a self-employed plan allows individuals to save as much as $66,000 of their net self-employment income in 2023 (depending on the type of self-employment retirement plan they choose). Self-employed people can also add a spouse to the plan.
Another benefit is you can add another plan on top of a 401(k) P.S.P. plan called a Cash Balance Plan. Cash Balance plans allow for really large contributions to key employees.
No special account is required to open a self-employed retirement plan. They can be opened through banks, brokerage houses, insurance companies, mutual fund companies, and credit unions without a minimum balance. However, within small plans, the investment advisor can offer a more personal investment lineup (not just mutual funds) to suit your needs. It is best to speak with a qualified retirement planning financial advisor to discuss your options and open your self-employed retirement plan.
Conclusion
If you are self-employed, you can plan for your retirement with tax-deferred income with a self-employed retirement plan. Before you determine the best plan for your unique situation, it is best to speak with a retirement plan specialist. Contact Scott Tanker at Retirement Plan Services Group at 609-922-0201 or www.retriementplanningservicesgroup.com today. And keep on saving!