Retirement Plans for the Self-Employed
October 22, 2007 by Miranda Marquit
Filed under Finance
When it comes to being self-employed, there are many things that you have to think about on your own. From health insurance to retirement plans, you only have yourself to rely on when getting some of the things that many people who work for “the man” take for granted.
Happily, in terms of retirement plans, there are several to choose from for the self-employed. There are plans that can be used for your business, to cover your employees, and there are plans that offer benefits just for yourself, in the event that you just make money yourself, and don’t have employees.
Personally, I prefer the Roth IRA. My husband and I each only work part time, so our income remains below the required level for the Roth IRA. This system is easy to set up, and the earnings grow tax-free and the withdrawals will be tax-free as well. But there are other retirement plans for the self-employed, including:
Nicole at Dollars & Sense Education has put together a rather handy chart that compares the four plans listed above, in order to help you better compare your options for retirement plans when self-employed:
Great information, Miranda. I’ve going to refer my readers at Home Biz Notes to this post.
Absolutely, post the graphic!!!
Thanks!
One thing I’ve been interested in is the possibility of a Roth401k that I set up for myself using my home based biz and LLC to route it through. I just haven’t found anything about this on the web.
Seen anything resembling this in your research for this post?
Good question. Combining the higher income allowances and contributions with the Roth tax-free growth and withdrawal.
I’ve only seen this through companies, but there are solo 401(k)s, so one would think it should be possible. But the Roth 401(k) is so new that I would consider speaking with a retirement planning professional, or a knowledgeable accountant or tax attorney.
You can definitely have a Solo ROTH 401K but not many companies offer it. Check out 401Kbrokers.com.
Thanks for the tip, Nicole!