I have a unique opportunity. My father has retired and left the family small business to me. As a Novice Fool I thought I'd get some help from the at-large fool community in choosing a retirement plan. We currently have none so I'll be starting from scratch. I want to strike a balance between what will be good for me and for my future employees (currently I am IT!), and not having to spend MY money on a brand new employee that may or may not stick.I am in the business of Carpet Care and Disastor Restoration. (Hope I can get the contract for the Planet Hollywood thing :-) ).I expect to have 3 employees within 6 months. I have looked at Simple plans and 401Ks and would really like some foolish opinions,I would like something that would make the plan available to the employees as soon as they finish 90 day probation period BUT that I would not be requred to contribute to until they had been around a year or so....BUT that I could contribute from the business to MY account immediately.Lot of stuff here I know but if you have any ideas....POST EM!
I would suggest you go to the library to read up on what is available for you (401k, SIMPLE-IRA, SEP-IRA, defined contribution, defined benefit, profit-sharing, etc.). There seem to be many web links that discuss this. Just search for the above keywords.You want to be able to maximize your retirement savings, while being able to minimize your contribution to your employees' account, if you choose. You also need to consider plan fees, who pays them, etc.If you contact a mutual fund family, like Fidelity, Vanquared, or TRowePrice, they can probably also help you with that.Zev
OK I've done a lot of reading the past couple of days. Now help me with this. I have settled on a SIMPLE IRA. And pretty much narrowed the field to two companies. One has a $10 per account per year charge, and limits participants to only their own mutual funds. The other has a $25 per account per year charge and has a "brokerage" plan. It allows participants to access all of it's mutual funds and several from other companies PLUS it allows investing in stocks, bonds, t-bills etc.Being new to Fooldom I'm not sure which is the Foolish way to go. The maximum contribution would be $6600 so does the $25 wipe out the advantages of broader investing? My guess is go for the broader plan with the higher fee. So what do the Fools at large think?
So what do the Fools at large think?Since I assume you want the opportunity to maximize your return, is the extra $15/account/year that you will pay, worth the extra return on $6600, compounded. You may need a spreadsheet to work out the various scenarios between expected return and the number of employees you will be paying for, plus any matching funds you will kick in.Also, you didn't indicate what the sales charges are on the mutual funds, and what the brokerage fee is on the stocks. I don't know if that makes much of a difference.Zev
So what do the Fools at large think?Since I assume you want the opportunity to maximize your return, consider if the extra $15/account/year that you will pay, is worth the expected extra return on $6600, compounded? You may need a spreadsheet to work out the various scenarios between expected return and the number of employees you will be paying for, plus any matching funds you will kick in.Also, you didn't indicate what the different sales charges are on the mutual funds, and what the brokerage fee is on the stocks. I don't know if that matters.Zev
Don't know what the charges for buying and selling are yet....printed info is on the way. The fees will be deducted from each participants account. The advertising info says that plan participants can get "discounted" trades. Not sure what that means yet. BUT I think being able to choose Stocks or Bonds or Mutual funds from several companies rather than just the one makes it worth the extra $15 unless the trading fees are especially high.Anyone else have an idea?
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