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Self-Employed and Small Business Owners: Are you Planning for Retirement?

July 31, 2018 by OSYB Staff

Sophia Bera, Gen Y Planning, shares a few options for those who are self-employed or small business owners to start retirement savings plans:

Individual Retirement Accounts (IRA) – opened and owned by you and you can choose either a traditional or Roth, note that there are differences between the two in terms of taxes and withdrawals

SEP-IRAs – can be opened by freelancers, contractors, self-employed individuals, or small business owners; similar to traditional IRAs in that you contribute pre-tax dollars and are taxed on withdrawals in retirement, contribution limits are significantly more in a SEP-IRA but be aware that limits can change

Solo 401(K) – can come in either traditional or Roth options.

Simple IRAs –  small business owners with less than 100 employees, can set up SIMPLE-IRAs. “As the employer you must contribute to the account, whether or not the employee contributes as well, and can contribute either 2% of the employee’s compensation, or a dollar-for-dollar match of employee contributions up to 3% of their compensation.”

Health Savings Accounts (HSAs) – allows you to set aside money to spend on qualified medical expenses if you have a high deductible health care plan. “Many people use their HSA as a form of retirement account because once you turn 65, you can withdraw money for any reason without paying penalties. You will have to pay taxes on money withdrawn for non-medical reasons.”

As with any financial recommendations, please consult your professional financial consultant.

For details and more information:  Retirement Planning if You’re Self-Employed or a Small Business Owner

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