A Guide to Establishing a Retirement Plan
Entrepreneurs who have started an LLC, S-Corporation, C-Corporation or sole proprietorship can find retirement plan guidance on a website recently launched by the U.S. Department of Labor and the American Institute of Certified Public Accounts.
The website, “Choosing A Retirement Solution for Your Small Business,” introduces several retirement plan options, describing their various features and advantages. The site allows business owners to list the type of corporation they own and what features they’re looking for in a plan on a form that will then suggest an option for a retirement plan program.
In a small business retirement plan guide, the IRS states that having a retirement plan may help business owners attract and retain quality employees. Retirement plans also have tax advantages. The money in the program can grow tax-free, employer contributions are deductible from the employer income and employee contributions are not taxed until they are distributed.
Private-sector retirement programs tend to be either an Individual Retirement Arrangement, defined contribution plan or defined benefit plan. IRAs are established by employees and the employer can help with the setup. Defined contribution plans don’t specify a specific retirement benefit and are created by the employer. Defined benefit plans do offer a specific amount to be given at retirement.