How to Get the Right Pension Funded Business Startup (part 1 of 2)
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.
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.
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.