Retirement Planning

For some business owners, starting their business is their opportunity to live their dreams. For others, the dream is what comes after the business.

There are some simple steps you can take to get the most future value out of your current business. It is all about how you structure your business.

The federal government is very interested in you paying for your own retirement.  There are some wonderful tax incentives to get you to set aside money for the future.

Let’s face it, Social Security is not going to pay much to anyone in the younger generation. (Like it pays that much now!)

You absolutely must have a 401(k) or IRA.  And if you qualify for a Roth for either of those, that is a great thing.  You should put the maximum in there every year.  With a Roth you pay taxes on the seed, not the harvest.

As a business owner, who is your favorite employee?  That’s right.  You.

As your favorite employee, you should have matching for any 401(k) or IRA contributions.  Then you get double the money in those retirement vehicles every year.  And you get more benefits by matching because they count as a business expense and are not taxable.

While you are at it, depending on the number of employees you have, you should look into profit sharing.

One more thing you should do with your 401(k) or IRA is make them self-directed.

Have you noticed how volatile the stock markets have been around the world?  That ain’t going to stop any time soon.  Have you seen the worldwide government debt crisis?  That’s why stock market volatility is here to stay.

With self-directed retirement accounts, you have options other than stocks.  You can invest in real estate (a great idea now that everything is on sale).  You can own a business within your retirement account.  You can obtain a loan or make a loan from within a self-directed retirement plan.

There are many rules that apply to these kinds of accounts, so get a competent adviser with expertise in this field.

There is no reason to pay more taxes than you are legally required to.  So why do you?

Tags: Employee Compensation, Entrepreneur, Financial Planning, Prosperity, Retirement Planning

This entry was posted on May 26, 2010 at 12:43 am and is filed under Business Plan. You can follow any responses to this entry through the RSS 2.0 feed.