Self Employed Retirement Plans
Self Employed Retirement Plans
Some of the first retirement plans for small business were called Keogh Plans. These plans were designed for self employed and small business owners to save for retirement. These plans could be constructed as a profit sharing plan or even a traditional pension plan. These plans were fairly complex and required more recordkeeping.
In 1978 Congress allowed employers to offer Simplified Employee Pension Plans (SEP IRA). These plans allowed employers to make contributions to IRA accounts for employees and themselves. These SEP plans can be ideal for small busines and easily established.
Another retirement plan, the Savings Incentive Match Plan for Employees (SIMPLE), came into existence in 1997. This plan is designed for companies with 100 or fewer employees who do not maintain any other retirement plan. The employer can offer a Simple IRA or a Simple 401k plan.
Solo 401k or Individual 401k plans work like regular 401k plans, except they're limited to one person firms with no employees other than a spouse. They are ideal for a person who wants to shelter more money than a SEP allows.
Make sure to read IRS Publication 560 for detailed information information on these plans.
Learn more about self-employed retirement plans: