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Business Retirement Plans and the Commitment Question

The life of a business owner is filled with tremendous responsibility and requires your full attention. As a business owner, you are left with little time to be an expert in investments, markets, and knowing the ins and outs of business retirement plans.

The first step in this process is asking yourself the commitment question: “Will I be able to commit to making matching contributions to my business retirement plan?” This is a very important question because it determines your level of flexibility when selecting your plan.

Some plans require that your business makes defined contributions in order to fulfill the requirements of that plan, and if not met, could result in costly penalties for your business. Selecting the right plan for your business also depends greatly on the type of business you own and your ability to make contributions to your plan.

The most common mistake business owners make with business retirement plans is that they select plans without asking themselves the commitment question. All too often they are faced with the financial cost of making this mistake; whether it be in tax penalties or having to establish a new plan. 

Most businesses tend to establish 401(k)/Self-Employed 401(k)s, SIMPLE IRAs, or SEP IRAs. We must understand that every business has different needs and it is strongly recommended that you consult with a tax professional before implementing any retirement plan for your business. 

There are several options available to any business owner, whether they are solely self-employed or have several employees. The major differences concerning these plans is flexibility, contribution limits and administrative requirements. In addition, your business entity type (c-corporation, s-corporation, partnership, or sole proprietorship) may also be a factor. A general understanding of business retirement plans can benefit you, your business, and your employees in a very big way. 

WHO CAN I WORK WITH TO MANAGE MY RETIREMENT PLAN?

Financial coaching and development should be an important part of your retirement plan and is a value-added benefit for you and your employees. A financial advisor can provide the investment guidance needed to help you and your employees achieve retirement goals. You and your employees deserve to know that your retirement is being taken care of and that you have a coach available to assist you in these matters. 

Is Your Business in California?

Did you know that California businesses will be required to offer their employees retirement plans? Any California employer with five or more employees is required to establish a company sponsored retirement plan or must provide their employees with the opportunity to participate in the CalSavers program starting July 1, 2019.

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Our Firm Can Help Your Small Business

MCF Capital Management, LLC is an independent, family-run, financial advisory firm that bases its investment approach on quantitative market data analysis. One of our key focuses is small and medium-sized businesses. Our firm’s dedication to business owners not only covers managing the needs of your business, but also the needs of your employees. 


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The opinions expressed here reflect the judgement of the author(s) as of this date and are subject to change without notice. Information presented here is for informational purposes only and does not intend to make an offer, solicitation, or recommendation for the sale or purchase of any product, security, or investment strategy. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed here. The information being provided is strictly as a courtesy.

MCF CAPITAL MANAGEMENT, LLC DOES NOT PROVIDE TAX ADVICE. PLEASE CONSULT WITH A TAX ADVISOR REGARDING YOUR SPECIFIC CIRCUMSTANCE.