Boomers in Business

Many Baby Boomers find themselves in a position to start a business or grow their business from a solo effort to one where employess are involved. Without ever losing your focus on retirement, there are steps that can be taken to make sure that you are paid first.

This week on MomsMakingaMillion Radio, the last in the three part series on small business retirement plans is discussed with Paul Petillo, managing editor for BlueCollarDollar.com and Target2025.com.

Kat: Today we discuss the SIMPLE IRA for small business in the last of our three part series with Paul on small business retirement plans.  Tell us just what simple is.

Paul: The SIMPLE IRA, named because those letters stand for Savings Incentive Match PLans for Employees, are a much cheaper and far less complicated way for small employers to establish and administer than a traditional 401(k).

This type of plan is indeed easier to manage and implement but there are a few rules you need to keep in mind before choosing a SIMPLE IRA plan for you and your employees. You are required to make a contribution for every worker who receives $5,000 or more in compensation. It doesn't have to be a lot but it has to be something up to but not exceeding $11,500 for the calendar year 2010.  After that, it will be adjusted upward based on the Cost of Living.

Kat: You said the small business owner is required to make a contribution? Listen to the whole interview here.