USAPlans educational notice: This article provides general information, not individualized legal, tax, investment or insurance advice.
Begin with cash-flow seasons
Map strong and weak months, tax deadlines, equipment purchases, insurance renewals and emergency reserves. A contribution target that ignores the business cycle may be abandoned quickly.
Separate the decision to open a plan from the amount ultimately contributed. Deadlines, employee rules and plan administration vary, so discuss them before year-end rather than after records are closed.
Consider employees before selecting a plan
Some arrangements are designed for an owner with no employees; others can include a crew. Eligibility, employer contributions, nondiscrimination rules, costs and fiduciary duties can materially change the choice.
Do not rely only on selling the business
A future sale depends on records, transferable customers, profitability, market conditions and how dependent the operation is on the owner. Building retirement assets outside the business can reduce reliance on one uncertain event.
Authoritative sources and further reading
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Use this guide to organize your facts, then contact the appropriate qualified professional when a decision depends on your specific circumstances.
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