Offering a retirement benefit
Offering a retirement benefit can be one way to encourage people to work for you—and potentially stay longer. Plus, you probably need retirement savings for yourself so you can build your own nest egg.There are a few different small business retirement plans to consider as you build your own future and show your employees that they’re valued. Here’s a look at different retirement plans for small businesses and what’s required. For a small business, it can make sense to use a SEP or SIMPLE IRA instead of offering a 401(k). SEP IRAs come with high contribution limits for business owners. SIMPLE IRAs allow business owners to.either offer matching contributions or simply contribute Northeast Mobile Number List to their employees’ plans.SEP IRAThe Simplified Employee Pension (SEP) IRA lets business owners contribute as much as 25% of compensation or $66,000 (for 2023), whichever is less. This makes it one of the best ways to contribute higher amounts to grow your nest egg.Setting up a SEP IRA is fairly straightforward: Create a formal agreement using IRS Form 5305-SEP or a document provided by a qualified financial institution.
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You can also create your own document, but that might be more of a challenge. Each eligible employee must receive information about the SEP IRA, including the agreement form you used to establish the plan. Create a SEP IRA account for each eligible employee. They will own and control their own accounts.There are a few rules to keep in mind with the SEP IRA. You must contribute the same percentage to your employees' plans that you're contributing to your own (but note: Your percentage is based on your business' modified net income, while your employees' percentages are based on their salaries—see example
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