A retirement plan is much like insurance policy. Whereas the dynamics of the business, costs of a plan and benefits change, so should the retirement plan? For these reasons, a business owner should evaluate their needs for a retirement plan every few years and make sure its cost and its overall benefit is in line with the business owner. You can hire best Montecito estate planning lawyers via various website online.
As a business matures or even contracts, the needs of the business owner also change. Therefore, one must look at the overall goals of your particular practice and then evaluate what options exist. All retirement plans are not the same. In fact, there is such a wide variety of retirement plans that learning more about your choices is a good idea. Here's a brief look at a few of the more popular types of retirement plans and what they have to offer.
The SEP IRA
Typically this is an excellent plan for a self-employed individual or an employer with few employees who is interested in a low-cost solution that enables income deferral. The SEP plan allows the employer to defer up to 25% of compensation but no more than $49,000 (2009). The downfall for this plan is that the employer is also obligated to contribute the same percentage that they to their employees accounts as they would themselves.
The SIMPLE IRA
This type of plan is geared for an employer with 100 or fewer employees that does not currently maintain another retirement plan. Typically, the business owner who has this vehicle has modest savings targets and/or is trying to cap contributions to employees.