When saving for retirement either as an individual or a business owner, one has to weigh the cost or benefit to do so. One can either use a taxable account, qualified account (IRA, 401k, SEP etc) or tax deferred accounts like annuities & Roth IRAs. The main considerations are tax benefits, costs, accessibility to money and tax implications when withdraws are required. A financial plan can help define all of these so clients can better access options.
For individuals the considerations above are fairly straight forward. However, for business owners they get much more complex since the costs for 401ks or SEPs and other qualified plans can be much higher and offset the tax benefits in doing so. Considerations need to be given to obligations created to contribute by the owner on behalf of employees vs the tax benefit in doing so. For example, as W2 payroll increases relative to owners W2 earnings the benefits can diminish. Thus, for small businesses that are bottom heavy with payroll qualified retirement accounts via the business may not be attractive at all. Fees, limitations on investment and time/complexity too weigh on their use.
BCA's retirement planning tools can weigh the benefits & cost for individuals and business owners regarding options. Contact us to access your options.
At Brecken Capital Advisors (BCA) we offer comprehensive planning and investment services for both individuals and small business owners. We build trust by transparently measuring both cost & performance across our client base. For more insights see our website and disclosures found there at BCA.