With
the coming end-of-the-year, it is natural for many
business owners and managers to start looking at their
retirement portfolio.
Unfortunately,
there is just one week left to to take advantage
of a one-time opportunity to really bolster that retirement
plan.
According
to Philadelphia attorney David Danzinger, this opportunity
is a great chance to add dollars while cleaning up
a retirement portfolio.
Danzinger reports that business owners and managers
can:
1. Take advantage of a fleeting opportunity. Special
incentives offered by Uncle Sam offer a 50% tax credit
for employers who adopt a new plan during calendar 2005.
2.
Increase Contributions for Owners & Family.
A common misperception among small business owners is
that retirement plans require huge contributions for
staff. With the right plan in place, there are smart
ways that this cost can be managed and substantial company
contributions targeted to business owners and their families.
3. Be flexible. Off the shelf 401(k) plans don't allow
employers to shift contributions among employees or scale
contributions up or down depending on company performance.
But there are cost effective services available that
do offer this flexibility.
4.
Make a 401(k) Safe Harbor Election. Under traditional
401(k) plans, contributions
for owners are limited by the average rate of deferrals
of rank and file. However, Safe Harbors are a new tool
enabling business owners to maximize their own 401(k)
deferrals even if the rank and file employees contribute
nothing at all. If the business employs family members,
these savings can be multiplied by allowing each family
member to defer 100% of income - up to $18,000 in 2005.
5. Move Quickly! To adopt a new plan with a 401(k)
Safe Harbor for 2005, the retirement plan needs to be
up-and-running by October 1st. Get the ball rolling now!
In light of changes in retirement offerings, other
benefits experts are urging small business owners to
re-evaluate their retirement planning programs earlier
than usual to take advantage of changes anticipated in
2006.
