Planning for Self-Employed Individuals and Business Owners
Self-employed individuals (including those who receive part-time income from freelancing or consulting) and business owners may be able to take advantage of any of a number of retirement plans, including:
- Simplified Employee Pension Plan (SEP) - A flexible, low-cost retirement plan with minimal administrative requirements, which is particularly appropriate for sole proprietors or small businesses.
- Savings Incentive Match Plan for Employees (SIMPLE) - For employees with 100 or fewer employees that do not currently have a retirement plan, and are looking for a 401(k)-type plan, but without the administrative costs and complexities of a 401(k).
- Profit Sharing Plan - Often established by a business looking for contribution flexibility and the benefits of a qualified plan.
- Money Purchase Plan - Generally best suited for established and companies that are willing to commit to a fixed annual contribution, since a money purchase plan require fixed contributions each year regardless of profits.