Pay yourself, Not Uncle Sam, for your retirement

Paying Yourself with your Retirement Plan
Retirement?  I am just focusing on getting the business started let alone worried about retiring!

That is what a lot of beginning business owners say when their CPA or Financial Advisor talks to them about setting up a retirement account. What most business owners don't see are the benefits of setting up the accounts:

1.  You get to keep your money and the government doesn't!

Your company gets a deduction for the contributions made on your behalf and therefore the income that you pay taxes on (as the company owner) are lower!

2.  You are not required to pay in the money right away

In most cases there are lag times for contributions to the accounts, some as far as 9.5 months into the future!  2007 contributions for a self-employed Schedule C person do not need to be made until October 15th, 2008 but you get a 2007 tax return deduction for it!

3.  Depending on the Plan you can put away up to or greater than $44,000 per year into your own account! 

Let's see your previous employer to that!  In some cases, depending on your age, time to retirement, and amount you want at retirement, you can put away hundred's of thousands (the max I've ever seen is $276k) a year as a deduction from your companies income!)

As you can see there are some great benefits to putting money into your own pocket for your future!  A lot depends on starting early and starting right, so make sure you talk to your CPA to determine what is the best and most efficient kind of Retirement plan for you!