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Establish these retirement plans

You still have time !

The problem with time is that you always think you have enough. And yet fall is already here, and the time for establishing a retirement plan for your business is ticking down to the deadline. Here are two plans with upcoming due dates.

  • Savings Incentive Match Plan for Employees (SIMPLE). The deadline for setting up a SIMPLE for your business is October 1. SIMPLEs are easy to establish and maintain. You can use an IRS “model” document to set up your plan, and you’re not required to file an annual retirement plan return with the IRS. Your business can deduct contributions made on behalf of employees. In addition, you may be eligible for a credit of up to $500 to offset the cost of establishing a plan and getting your employees enrolled.

    The maximum contribution for SIMPLE plans in 2016 is $12,500, plus an extra $3,000 when you’re over age 50.

  • Simplified Employee Pension plan (SEP). If you’re a sole proprietor and you requested an extension of time to file your tax return, the last day to establish and fund a SEP is October 17. You set up a SEP by signing a plan document such as IRS Form 5305-SEP, Simplified Employee Pension – Individual Retirement Accounts Contribution Agreement. Contributions are deductible, and you don’t have to file an annual return with the IRS.

    For 2016, the maximum contribution is $53,000.

Not sure which plan will suit your business? Contact us for a detailed comparison.

Are you stressed about your retirement savings?

A research study conducted by a global management firm turned up interesting results: younger workers are more stressed about retirement savings than older workers. Overall, 70% of the study’s participants were stressed about retirement. The biggest concerns among all participants were running out of money during retirement, and paying for health care.

If these results mirror your own retirement outlook, the best stress-reliever is to create a written plan. To start, your plan doesn’t have to be overly detailed. What you’re aiming for initially is a general map of where you want to be financially when you retire. That will give you a focus point and help you develop your objectives. From there, you can review your current retirement savings and investigate what options are available to you, such as employer-funded retirement accounts and IRAs. Knowing your options will help you select a savings strategy.

Following a consistent plan tailored to your goals is the way to success. Contact us for help.