FINANCIAL FOCUS

Retirement planning for your SMALL BUSINESS

Chances are, when you started your small business, retirement wasn’t the first thing on your mind. Even so, the future is growing nearer every day, and there are good reasons to move retirement planning to a high priority, both for yourself, as a business owner, and for your employees, as valued members of your team.

For starters, you will help your employees—if you have them—prepare financially for their own future. Offering a retirement plan could help you attract and retain employees who are important to the success of your business. Of course, a retirement plan makes it possible for you to work toward your own goals for the future as well.

And there’s an additional incentive to look into small business retirement plans: they offer potential tax savings to your business.

PLAN OPTIONS

Among retirement plans appropriate for small businesses are four that are especially popular with business owners these days.

A SEP-IRA (Simplified Employee Pension Plan) is for self-employed individuals or small businesses. Contributions are made only by you for yourself and your employees, and are generally tax deductible as a business expense.

A SIMPLE IRA (Savings Incentive Match Plan for Employees) is for any business with 100 or fewer employees.

By Robert May

Assistant Vice President

Frost Commercial Banking

It is funded by tax-deductible contributions you, as the employer, must make and pretax contributions your employees may make.

A SELF-EMPLOYED 401(K)

PLAN acknowledges that as a sole proprietor you wear two hats—employee and employer—and enables you to make contributions in both capacities. As an employee, you may make deferrals of earned income up to a fixed amount, and at the same time, in your role of employer, you also make profit-sharing contributions of a prescribed percentage of your compensation.

A TRADITIONAL 401(K)

PLAN enables employees to defer a portion of their salary and contribute that amount into a 401(k) plan sponsored by you, their employer. Contributions are generally made on a pretax basis, but some plans allow employees to make contributions on an after-tax basis as well. Many plans provide for employer matching or other contributions.

Which plan is the best fit for your small business? With several factors, such as ease of setup and administration, and cost, to consider, your wealth advisor and CPA are your best resources.

Would you like to talk to a financial professional? Contact Robert May at 713.388.7821 or Robert.May @frostbank.com.

Investment and insurance products are not FDIC insured, are not bank guaranteed, and may lose value.

Brokerage services offered through Frost Brokerage Services, Inc., Member FINRA/SIPC, and investment advisory services offered through Frost Investment Services, LLC, a registered investment adviser. Both companies are subsidiaries of Frost Bank.

Investment management services, financial planning and trust services are offered through Frost Wealth Advisors of Frost Bank.

Additionally, insurance products are offered through Frost Insurance.

Deposit and loan products are offered through Frost Bank, Member FDIC. Frost does not provide legal or tax advice. Please seek legal or tax advice from legal and/or tax professionals.

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