There\u2019s nothing wrong with \u201cfree\u201d \u2014 unless there\u2019s a hidden cost lurking beneath the surface. Small business plans that don\u2019t require filing a Form 5500 might sound great on paper, but when you look closer, you realize the real cost is in what you\u2019re missing out on for your retirement savings.<\/p>\n
Take SEPs, for example. They\u2019re a decent option, sure, but there\u2019s no opportunity for salary deferrals. And you have to contribute the same percentage for every eligible employee \u2014 no special treatment for yourself as an owner.<\/p>\n
Simple IRAs are nice, too, but the deferral limits are a lot lower than a 401(k), and again, contributions must be made pro-rata. That means no allocating bigger chunks to yourself while giving less to your employees.<\/p>\n
A solo 401(k) is a great tool if you\u2019re a one-person show \u2014 but it becomes obsolete the moment you hire that first employee.<\/p>\n
Bottom line: whatever your situation, you\u2019re doing yourself a disservice if you don\u2019t explore all the retirement plan options out there. Find what really fits your business and your goals, because the cheapest or easiest plan might not be the best plan for you.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" There\u2019s nothing wrong with \u201cfree\u201d \u2014 unless there\u2019s a hidden cost lurking beneath the surface. Small business plans that don\u2019t require filing a Form 5500 might sound great on paper, but when you look closer, you realize the real cost … Continue reading