Business Owners: Making It To Retirement.

Most small business owners are sole proprietors or partners, although an increasing number are members of limited liability companies (LLCs). Generally speaking, these types of businesses cannot contribute quite as much to retirement plans as corporations. But for most small business folks who make under $100,000 per year, this is not a drawback, and many excellent tax-advantaged plan opportunities are available to them. On the other hand, owners of fast-growing small businesses, weighing the advantages of incorporating, should consider the greater retirement plan benefits that C corporations can offer.

For those who qualify, the Simplified Employee Pension plan (SEP) is the top choice to put aside money for retirement. Since SEPs are covered by most of the same tax code provisions as IRAs (except the IRA's meager contribution limits), they are often called SEP-IRA's. A SEP is easy to establish and maintain, for once, the term "simplified" is really accurate.

A SEP can be either a primary or supplemental retirement plan, and can cover people with either full or part-time self-employment income.

A separate SEP account is opened for each business owner or eligible employee, unlike a Keogh, where just one plan covers the owner(s) and employees. If the business owner has no SEP, employees may still establish their own individual SEPs.

If your business makes enough to fund a retirement plan, you should go for either a Keogh or SEP plan. It is not an uncommon practice to combine the two, or start with a SEP and later switch to a Keogh. SEPs and Keoghs offer the major benefits of the other tax-favored retirement plans: you can deduct earnings contributed to the plan, and income earned on funds as the plan accumulates tax-free until withdrawn. But there's one big catch: to take advantage of one of these plans, you may have to include your employees. For information including the infamous "401-K Plan" call:

For more information including the infamous "401-K Plan" call Geoff at:

FREEMAN AND COMPANY represents over 1,000 investment bank funds (mutual funds). We will gladly assist in building TAX-ADVANTAGED benefit plans and aid in the selection of HIGH QUALITY INVESTMENT/RETIREMENT mutual funds.

Also, if you are considering incorporating and need guidance, please contact Geoffrey at FREEMAN AND COMPANY.