A wide array of business retirement plans are available that benefit you at tax time. While the plans vary subtly in the tax benefits they provide, what we’re generally looking at is some combination of tax-deductible contributions, tax-deferred growth, and (in the case of Roth contributions), potential tax-free withdrawals.
SIMPLE IRA
SIMPLE stands for Savings Incentive Match Plan for Employees. Perhaps the best way to describe the SIMPLE IRA plan is as the little brother of the more robust but more costly 401(k) plan. Much like the traditional 401(k) plan, the SIMPLE IRA Plan allows for both employer contributions as well as employee salary deferral contributions.
Issue
Many small employers want to facilitate and offer retirement savings for their employees, but it can be daunting and time-consuming to sort through the available options. However, a number of changes in the marketplaces are making it easier and more affordable for small businesses to offer a retirement plan.
Although retirement planning may not always be a high priority for busy small business owners, there are plenty of options available to help you start saving for the future. Read on for an overview of common workplace-based plans.