Saturday November 21, 2009

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Tax-Free Retirement Accounts for the Self-Employed
Comparing SEPs, Keoghs, Roth IRAs and traditional IRAs.
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Jan Posted: 1:04 PM On November 17, 2009
I was an employee for 8 months in 2009 with a company with no employee retirement plan. What vehicle can I use to put away retirement and how much? Now, for the last four months of the year, I am/will be self employed. It sounds as though I will want to do a solo 401k putting away 25%. Is that the optimum vehicle? Is there a limit? thanks for the website.
Steven Duval Posted: 2:56 AM On May 2, 2009
One account completely ignored in this post is under tax rule 7702, usually called a 7702 Private Plan. This plan is particularly suited for a self employed individual for several reasons, better liquidity in the event cash is needed or there is an opportunity, unlimited contributions, and safety! In a properly structured 7702 Private Plan (using the equity index credit strategy) the account earns interest based on gains in the market without exposure to market risk, and the company administering the plan is highly regulated and must keep dollar for dollar reserves on the books. Great article with lots of great information for the self employed.
Dant Posted: 10:43 AM On April 4, 2009
Hi.

My wife is an employee who contributes to 401K. We are over the 176000 income limit. I am paid as slef-employed/part owner (3%) on a K1. Can I make any sort of retirement plan contribution? Perhaps a SEP? It is not my company ( I am a minority partner) as it were so do I have to accommodate the other employees?
FP Posted: 8:17 PM On February 1, 2009
I've same situation as 'Dave'. I like to discuss my options. Please let me know how to contact you.
Taxlady Posted: 2:24 PM On January 3, 2009
My brother contributes 16, ooo to Retirement plan 403(b) through his job as a professor. He also has a consulting company that has established Keough plan for himself. He owns the consulting business and is the only employee. He is 55 years old. Can he still contribute $ 50,000 to his keough plan for 2008 for his consulting although he has already contributed $ 16,000 to 403(b) plan sole employee of this company? He has enough net income form his consulting company for 2008 to go to the maximum contribution.
brucely Posted: 1:27 AM On October 29, 2008
Hi this is brucely.Can you please give me more information about this Taz-Free Retirement Accounts for the Self-Employed.Why because i am a unemploye.
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Brucely.
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Charles Posted: 2:58 PM On October 28, 2008
I am a young, self-employed minister and have a job at a church that does not contribute any sort of retirement. Currently I have no retirement savings, but we have a little bit of savings in the bank. My wife has a small retirement plan through her work, but she is part-time, so we're looking to save more. She also has a 403(b) from a former employer that we'd like to rollover. What are our best options? SEP and Roth?
katiesmily Posted: 11:14 PM On October 21, 2008
Thank you for introducing this site.Your site was quite interesting and informative.
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Katie
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Daryl Posted: 9:39 AM On October 8, 2008
Ed,

With a 'qualified retirement plan', you must include your employees, but with a 'non-qualified plan', you can choose not to. I'm working with a nightclub/restaurant owner out in TN right now that came to me because of the same situation. Send me an email at dmbrandon@entaire.com and I'll walk you through your options.
Ed Posted: 12:17 AM On October 8, 2008
I own a nightclub and have high employee turnover so I don't wish to provide employees with retirement benefits. What are my options??
Daryl Posted: 10:50 PM On October 7, 2008
Sure, you have options. Investigate 'non-qualified' retirement plans. They give you the ability to have 'selective eligibility' and 'uncapped contributions'. These plans are geared specifically towards the business owners.
BMorgan Posted: 4:17 PM On October 7, 2008
I am self employed and have 5 employees. I currently invest in a SEP and have 1 employee that is eligible for retirement benefits as well. I have another employee that will be eligible in the year 2009. I am looking for another option so that I am not paying out so much retirement benefits on my employees, while still investing as much as I can for myself. Currently my contribution is 25% of my income.

Any ideas?
BMorgan Posted: 4:16 PM On October 7, 2008
I am self employed and have 5 employees. I currently invest in a SEP and have 1 employee that is eligible for retirement benefits as well. I have another employee that will be eligible in the year 2009. I am looking for another option so that I am not paying out so much retirement benefits on my employees, while still investing as much as I can for myself. Currently my contribution is 25% of my income.

Any ideas?
Daryl Posted: 3:00 PM On September 26, 2008
Tricia,

Good question... The answer is yes; you have to offer the 401k to your employees. Even if they opt out of the 401k, you must maintain a certain participation percentage to maintain the tax benefits of the plan and there are also 3rd party admin fees associated with handling the 401k regardless of the participation rate. If you’d like options, shoot me an email and we will work together to find a solution for you and your business. Just remind me in your email that you’re Tricia from the ‘Smallbiz’ website; I’ll remember your issue.


Thanks,
dmbrandon@entaire.com
Daryl Posted: 2:21 PM On September 26, 2008
Tricia,

Good question... The answer is yes; you have to offer the 401k to your employees. Even if they opt out of the 401k, you must maintain a certain participation percentage to maintain the tax benefits of the plan and there are also 3rd party admin fees associated with handling the 401k regardless of the participation rate. If you’d like options, shoot me an email and we will work together to find a solution for you and your business. Just remind me in your email that you’re Tricia from the ‘Smallbiz’ website; I’ll remember your issue.


Thanks,
dmbrandon@entaire.com
Daryl Posted: 2:03 PM On September 26, 2008
Tricia,

Good question... The answer is yes; you have to offer the 401k to your employees. Even if they opt out of the 401k, you must maintain a certain participation percentage to maintain the tax benefits of the plan and there are also 3rd party admin fees associated with handling the 401k regardless of the participation rate. If you’d like options, shoot me an email and we will work together to find a solution for you and your business. Just remind me in your email that you’re Tricia from the ‘Smallbiz’ website; I’ll remember your issue.


Thanks,
dmbrandon@entaire.com
tricia Posted: 10:55 PM On September 25, 2008
I have a small business -all of my employees are teens and have worked for me for 2 years or less. Can I open a 401 for myself- or do I have to offer to them I guarantee they would not be interested- most of them only work 10 hours per week.
Daryl Posted: 3:56 PM On September 24, 2008
Dave,

Yes; you may have options, but it will depend on the stability of your side business. I assisted a business owner in your same situation not too long ago. Therefore, it is a possibility that we could work with you and your wife as well. We have the ability to reposition assets from your S corp in order to allow those business assets to work for you personally in a tax efficient manner for your retirement. Send me an email offline and I’ll explain how.

dmbrandon@entaire.com
Dave Posted: 5:40 PM On September 22, 2008
Here is a question: I have full time job and a 401 K. My wife and I also own our own S corp as a side business. We are the only employees. This business is just 'extra' money as we live off of my full time employment income, therefore we are looking to use the secondary income as retirement, investment, etc and or course take the least tax hit as possible. What is the best retirement program to accomplish this and can I be part of it since I already have a 401k at my full time job??
Dave Posted: 4:21 PM On September 22, 2008
Here is a question: I have full time job and a 401 K. My wife and I also own our own S corp as a side business. We are the only employees. This business is just 'extra' money as we live off of my full time employment income, therefore we are looking to use the secondary income as retirement, investment, etc and or course take the least tax hit as possible. What is the best retirement program to accomplish this and can I be part of it since I already have a 401k at my full time job??
Daryl Posted: 11:38 AM On August 29, 2008
There is also another tax effective retirement strategy in the marketplace for business owners ONLY. No employee involvement needed. There are no limits on contributions so it can also be used as a great catch-up strategy. Best of all, you will be using 'other people's money' to fund your own personal retirement. Go to www.financedplanning.com for more information and/or email me at dmbrandon@entaire.com set up a time to speak with me directly.
JEVD Posted: 6:29 PM On April 9, 2008
The title is somewhat misleading. Tax Free only applies to the earnings on a Roth IRA. You do pay tax on the contributions and there is no deduction.

You should point out that distributions from all of the other plans are generally taxable
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