How to Choose Best Retirement Plan for Small Business

[Guest Deborah]

Hi,

I have recently started investigating

retirement plans for our company and have found out there are quite a few options!

I would appreciate any info/links/advice on "How to Choose" the best retirement plan for our business.(i.e.,advantages/disadvantages) We are a family run small business,LLC taxed as partnership, 7 employees (4 partners, 3 employees).

Thanks for your help!

[Guest Roman]

E-mail me (rtu@pdq.net) the census data on your company, e.g., date of birth, date of hire and compensation and I will do a feasibility study on the options you have for setting up a retirement plan at no charge.

Roman

[Guest ERead]

Here is a link you may use - it may prove helpful.

www.psca.org/issues.html

Good luck!

[Lorraine Dorsa]

My firm does a lot of work with small closely held companies and our website has information/examples of plans for these types of entities. Look us up at lda-fcpa.com.

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[Larry M]

Your question is not an easy one to answer by memo.

A retirement plan is a long term investment which should be designed properly at the beginning.

Because it will accumulate a large amount of assets in a relatively short period of time, you need to be sure you have designed one which best fits your current needs and your ability to pay. Bear in mind, as your needs change, as Congress changes the laws concerning these plans and as the economy changes, you will want to and need to change the plan.

There are many web sites, books and other such resources available to give you some of the basic information.

They will tell you of the types of plans and some of the advantages and disadvantages of each.

BUT -

You need and should have information which is pertinent to your firm, your needs and your abiility to pay.

[i would not build a home without the help of a good architect and good contractor - both of whom should know what I want in the house and how I will be living in it. A Frank Lloyd Wright house may be an architectural delight, but its ceilings are too low for my comfort.

So, too, with a retirement plan. There are all sorts of plans around which are perfect for someone. But this is the one which must fit you.]

Therefore, I urge you to meet with a group of people who can help you decide.

The group should include persons who are aware of your and your firm's needs and financial status and who have a knowledge of retirement plan laws (ERISA, for short). The ones who should be there are your accountant, the firm's tax attorney (and, if he is not conversant with ERISA, an ERISA attorney) and a consulting actuary.

At this meeting, which should take about one hour, tell them what YOU want and you should be able to get an idea as to which types of programs best fit your firm (and, at the same time, you may also get a feeling as to whether you can work comfortably with the new people). Once that is determined, get specific proposals for the one or two plans which seem to fit best.

Review the proposals, discuss them with the advisors, make the changes you feel are best for you and choose the plan options which most closely fit all your needs, ability to pay and comfort zone.

Bear in mind, although this is a long term investment, things do change. Make sure you can change the plan without too much penalty or heartache.

Fortunately, you are in an area where there are a large number of good, knowledgable advisors available who are close to you.

If you want some names, send an email to me and I shall respond.

good luck - and welcome to our world.