Power Blog Article Directory

How to Get the Right Pension Funded Business Startup

How to Get the Right Pension Funded Business Startup

For those intending to have pension-funded business startups, planning must start way, way back. The first step, indeed, is to choose the right pension for your business. The ideal pension generates enough profit and mature as soon as possible.

Types of Pension You Can Use for Your Business Startup
Sharing your business startup plans with your employer could help you end up with the right pension for your needs.

SEP-IRA
This is fairly simple to set up and maintain. Best of all, funding responsibility is completely shouldered by your employer. Of course, there are several requirements you’ve to meet before you can qualify for this type of pension. Firstly, your employer or the business you’re working for must not be currently using any other retirement plan. Secondly, the maximum contribution shouldn’t go beyond $24,000 annually or 15% of your compensation, whichever comes first.

The SEP-IRA is excellent for business startups because you can withdraw money from your account whenever you want. Withdrawals, however, may be subject to penalties – depending on your age – and taxes.

Profit Sharing
This is also an excellent option for business startups because of the generally large amount of money it’s able to generate for employees. Funding responsibilities are again shouldered by the employer, but it’s up to your boss to determine how much contribution he’d hand over each year.

Withdrawals may be made, but they could also be subject to penalties and taxes depending on your age as well as the amount of money you intend to withdraw.

Money Purchase Plan
The maximum employer contribution requirement for this type of pension plan is $30,000 or 25% of your salary, whichever comes first. Again, employers are solely responsible for making contributions but as there’s no model used for this type of setup, it’s entirely up to them to determine the size and date of their contributions as well as other conditions for the pension. In most cases, benefits are only distributed when employees reach retirement age, but your employer could allow participant loans.

To qualify for money purchase plans, you must be at least 21 years old and have worked for your current company for at least one thousand hours in the previous year.

401(k)
This salary reduction plan may have slightly complicated terms set for contributions and withdrawals, but if you want a pension plan that starts and pays immediately with minimum paperwork, a 401(k) is exactly what you need.

Contributions will be mainly shouldered by the employee, but there are situations where the contributions would be matched or even completely taken over by your employer. Maximum contribution for the employee is an indexed amount of $6,000 but they can also contribute as little as you want. Employers, on the other hand, have to hand over matching contributions or if no that then at least equivalent to at last 2% of your salary.

To qualify for a 401(k), you must have earned a minimum amount of $5,000 in the previous two years. Withdrawals, on the other hand, can be made whenever you want. There will be penalties, however, if you make an instant withdrawal within the first two years of your pension plan (you’ll have to pay a whopping 25% penalty in fact!). Subsequent withdrawals made when you haven’t reached 59 ½ years of age will be subjected to 10% penalty instead.

Now that you know your best options, make sure you choose the right foundation for your pension-funded business startup plans.

More Articles:

Tips for Finding Loans for Your Business Startup
You'll need to be a very creative and resourceful entrepreneur indeed if you want to start a business with no funding.Although there are a few businesses that you can realistically put up with little or no money, most opportunities do require that you have startup funding at least.One of the bes...
Read Full Article...
Startup Tips for Running a Medical Coding or Billing Business
The medical industry offers a healthy opportunity for anyone who wishes to go into business – and you don't even have to go through medical school just to reap the benefits.Simply by starting a medical coding or billing business, you could offer a very valuable service to the industry and become a...
Read Full Article...
Management Tips for Free Startup Home Business Success
A free startup home business may seem inferior to other types of businesses at first glance but if you use the management tips below, you can prove to everyone that it’s possible to earn lots of money even if you’ve started with nothing!

Scheduling
Mixing business with pleasure is never advisabl...
Read Full Article...
Private Investors for Startup Small Business
Private investors for startup small businesses may not be a dime in a dozen these days, but if you’ve truly a worthwhile idea for business to propose then there’s nothing to worry about. Speak the right words at the right time and place to the right person and you can get yourself some takers!

Ho...
Read Full Article...
Refining a Startup Idea in a Business
Startup ideas for a business usually start small, shapeless, and vague. The tips below, however, will help mold them to reality.

Nature
What do you intend to sell? In most cases, people don’t have a hard time determining what they’d like to sell…in general. It’s when they need to get specific th...
Read Full Article...

Subscriptions

Subscribe to our FREE web traffic course and receive FREE software, ebooks and a surprise BONUS!.
First Name:
Email Address:


You must confirm your email address in order to receive the download link.

Recent Articles


Menu

Categories

Resources





 

Imagine a single website that will promote these fine programs 24/7 and never calls in sick.

Plug-In Profit Site
will automatically promote:

Privacy | copyright www.powerblogclub.com (c) 2007 | Terms of Service