I have been thinking about starting a small business for awhile and have a question when saving for retirement. When you work for a large corp, like I currently do now, you can open a 401k with them, as well as save in your IRA. Obviously business owners can still put away $5k in your IRA each year. But owning your own business, you're missing our of having a 401k as well. Is there some other sort of retirement savings that small business owners use, in place of a 401k?
You can set up an individual 401(k) for yourself and your spouse if you are self-employed. Depending on how succesful you are, you can even contribute more to it than you can contribute to a traditional 401(K).
Thanks captain obvious. I said besides an IRA (meaning traditional or Roth). You can only contribute 5k/yr to that.
Oh, ok, thanks. I figured people who were self employed could set up their own 401k or something similar. Thanks bro.
You can also set up a 401(k). There are some small expenses to it, but those are all tax deductable. Also if you're setting this up yourself, you can maximize your retirement benefits by setting up profit sharing plans that allow you to sock away the maximum annual contributions tax free (over 40k per year). I work for a retirement plan company. Email me through the board if you'd like someone from my company to contact you about your options.
