It’s easy for a small business owner to be so caught up with their business that they forget to take care of themselves. One such area of personal neglect is their retirement program. It’s not their fault however; most small business owners feel that they don’t have enough employees to warrant a 401k plan. The plain fact is that all you need is one. You.
From US News & World Report, since 2001, self-employed people or business owners with less than 50 employees can invest up to a max of $46,000 in a 401k. Up to $15,500 dollars can be invested from personal income and the rest to come from up to 25 percent of their business’s profits. $46,000 may not seem like much – which is a good problem to have – but that amount can make a big difference such as dropping you a tax bracket.
There are many options of which type of 401k plan to invest in, as well as an array of third-party advisors to help you make the investment. Choosing which one that best fits you is a process like any other investment decision – and one that is left up to the student as an exercise. However, simply knowing you have the option to take advantage of the 401k system is a giant leap forward in itself. Do your homework and weigh your options, and make your retirement more secure.
