a COTPRELE rement: Common Retirement Plans For The Self-Employed (NAPSA)—Nearly two-thirds of micro-business owners do not have a retirement plan because they believe they cannot afford to administer or contribute to it, according to a survey by the National Association for the SelfEmployed (NASE). “These days, there’s a retirement plan to fit nearly everyone’s lifestyle,” said NASE lead business advisor GeneFairbrother. “You just need to consider a few basic principles, like the amount of disposable cash available to fund your plan annually, your age, the number of years before retirement and whether you have employees.” According to Fairbrother and the NASE, the following are popular retirement plans for the selfemployed: Individual TRA—These accounts are easy to set up but limit annual contributions. Individual IRAsare best for individuals who are able to contribute no more than a few thousand dollars each year. Roth TRA—The Roth is an after-tax IRA. Like the Individual TRA, it is a low-maintenance and low-contribution option. With a Roth, an individual may be required to phase out contributions as incomelevel increases. e Simple TRA—For employers who want to offer a retirement benefit to their employees, as well as themselves, the Simple IRA is a good place to start. Designed to allow employers to kick in to an employee’s account, this plan allows greater yearly contribution potential. Employers may find it 401(k) plan (any type) 28.1% SIMPLE plan 21.6% SEP plan 42.9% Keogh plan 2.1% Profit sharing plan 5.3% All other plans No response 9.3% 1.5% @ Self-employed individuals tend to gravitate toward these common plans. more costly, however, as it re- quires contributionsfor all eligible employees. e SEP-IRA—This plan allows higher maximum contributions than the previous plans and is fully funded by available business funds. Like the Simple IRA, it requires that eligible employees receive the same base contribution as the business owners. e Individual 401(k)—An excellent way to maximize the amount contributed towardretirement, this plan is limited to businesses in which the owner and spouse are the only employees. As in traditional 401(k) plans, the owner can borrow from the fund. However, it can cost more in administrative fees. e Keogh—Expensive, requiring high levels of administration and the filing of an annual report with the IRS. On the other hand, the plan maybe desirable for individuals who seek the ability to make contributions of considerably large amounts to a retirement plan. For more information, visit www.NASE.org.
