Three Retirement Plan Options For The Self-Employed

Three Retirement Plan Options For The Self-EmployedRetirement is an area we have always slacked in. We’ve never saved or research retirement options as aggressively as we would have liked.

That is all going to change now.

We still plan on living an enjoyable life, but we want to start investing more of our money and seeking out the best self-employed retirement plan for our situation.

Below are some of the different self-employment retirement plans that may be available to you:

Solo 401(k) Plan

This is the retirement plan that most people have probably heard of.

With a solo 401(k), you can contribute up to $17,500 in 2014 and $18,000 in 2015. You can also contribute an extra 25% of your net earnings from self-employment for a maximum total solo 401(k) contribution of $52,000 for 2014 and $53,000 for 2015 if you are under the age of 50. If you are 50 or older, then you can make an additional contribution of $5,500 in 2014 and $6,000 in 2015.

Here are some other things you may want to know about the solo 401(k):

  • The solo 401(k) is a self-employed retirement plan for a person who has no employees.
  • You must open a Solo 401(k) by December 31st.
  • The solo 401(k) is a great plan for a self-employed person because the maximum you can contribute to the plan is high.
  • Your money grows tax-deferred in this plan until you reach retirement age.

Simplified Employee Pension Plan (SEP)

I’ve had a SEP plan for a few years now. Before I started working completely for myself, I had a SEP at my day job. I worked for a very small investment firm where I was able to have a pretty nice retirement plan there.

You can have a SEP IRA whether or not you have employees. With a SEP plan, if you have employees, you will be required to contribute retirement funds towards their accounts as well. Employees do not contribute anything, only the employer. This is why I loved my SEP plan at my day job so much. It was completely free money and you are required to receive the same exact percentage as everyone else at your company.

With a SEP plan, you can contribute as much as 25% of your net income from self-employment, up to $52,000 in 2014. For 2015, the number is $53,000.

Here are some other things you may want to know about having a SEP:

  • You can create and fund a SEP plan until the tax-filing deadline. If you file an extension, you have until October 15.
  • Your money grows tax-deferred in this plan until you reach retirement age.
  • It is also easy to create, easy to maintain, and cheap to operate.

Savings Incentive Match Plan for Employees (SIMPLE IRA Plan)

With a SIMPLE IRA Plan, you can put up to $12,000 in 2014 of your net income into the plan, and up to $12,500 for 2015. If you are 50 or older, you can contribute an extra $2,500 in 2014 and an extra $3,000 in 2015.

You can have a SIMPLE IRA whether or not you have employees. The SIMPLE IRA Plan is usually best for those who make less than around $50,000 a year because of the lower contribution limits.

How do you save for retirement? Are you on track?


Please keep in mind that I am not a tax professional. This post is meant for informational and entertainment purposes. Always do your own research and seek out help if you need it.

How Being Cheap Can Hurt Your Business

How Being Cheap Can Hurt Your BusinessHave you ever witnessed a business that was acting so cheap that it was obviously hurting their business? Almost like they didn’t want to be in the business anymore and were purposely burning their business down? I have.

It’s a sad situation that doesn’t have to happen, yet it does all the time. It may seem like obvious mistakes to those on the outside, but to those who work at the company it may be a different story.

I’ve personally seen businesses close their doors because they were too cheap. The owners always believed they were helping the company by being cheap, but it actually turned out in many cases that they were preventing their company from growing. They were turning customers away, they were making good employees leave, and they were losing out on possible sales.

Below is how being cheap can hurt your business:

You won’t invest in items that will make your business appear better.

Depending on what kind of business you run, I’m sure there is some sort of appearance that you would like to keep. Your business should always be presentable and demonstrate the image you want your customers to see.

For example, if you run a brick and mortar store where customers come in and shop for high-quality expensive items, your store should be presentable and clean. If you skip out on cleaning windows, cleaning the floor, and so on in order to save a few dollars, this can scare customers away. For this reason, we recommend using professional cleaning services.

You run your employees ragged.

Do you have enough employees for your business? If you make enough income to hire another employee when you need one, it’s something you should definitely look into.

You do not want to overwork your employees and make all of them want to leave your company. This can cost you your best workers, and they may leave your company and join your competition instead.

You try to do everything yourself.

I’ve seen this happen several times. A person is building a business and tries to do everything themselves. They might be afraid to hire out because of the costs and because this means they may lose some control of their business.

However, this almost always is a recipe for disaster. Yes, in the beginning you may be able to do some tasks yourself, but you may actually start to hurt yourself and your business. All businesses either grow or die out. If your business is growing, then you will need help eventually with your business.

I have mentioned this story before. I used to work next to a retail store where the business owner literally managed everything himself. He was the store owner, he managed the inventory, he cleaned the store, he stocked the shelves, he opened and closed the store each day, he was the cashier, and everything else. His store ended up closing because he was too cheap to hire anyone to help him. There’s only so much one person can do before it negatively affects their business.

You won’t hire an accountant or a lawyer.

This one is related to the above section, but I think it deserves its own little area. Too many people think they are saving money by not hiring an accountant or a lawyer for their business. In some businesses this is not a necessity, but in many they are.

An accountant can save you money on your taxes, and help you in many other areas such as helping set up and manage retirement plans. A lawyer can help draft agreements and contracts, and they can also do other things such as help you get a trademark.

How else do you think being cheap can hurt a business?

What real life examples have you witnessed?


How To Get Everyone At Your Office To Hate You

357361903_63c51d4c1f_zWhether you are the person everyone hates or you know who the person is in your office, there are, of course, things everyone can work on. This post is not to bully anyone, it’s just meant to enlighten. For many, they do not even realize that the things they are doing actually drive others crazy.

I know that many people have that one person in their office that drives them crazy. However, what if you are the person in your office that people cannot stand? You might be if you are doing any of the below.

Below are tips to get everyone at your office to hate you, or you can do the opposite so that you can make friends 🙂

You eat stinky food for lunch each day.

Eating smelly food for lunch at work just once or often can be making everyone at your work hate you. I remember accidentally making this mistake one day at work.

It was when I worked at a retail store and I did not realize that my burrito would have smelled that bad. A few actually complained about it, and I felt horrible. Luckily only those in the back room (not on the retail floor) could actually smell it.

Your desk is a disaster.

Do you have garbage all over your desk? Maybe your office even STINKS because of the huge mess you’ve created. Maybe whenever a coworker asks you for something you can never find it?

If your office is extremely messy (like in the picture above), you may be driving your coworkers crazy.

You spread rumors.

Do you spend every Monday morning going around the office gossiping and spreading rumors for a few hours? Whatever the reason for why you feel the need to do this, you are probably making a lot of your coworkers mad at you, especially if you are telling lies about them. Some may feel like they cannot trust you as well.

Your e-mails are not very professional.

Do you know how to properly send emails? Here are some examples of emails that may be driving your coworkers nuts:

  • You use a LOT of exclamation points!!!
  • You send chain emails that tell people they are going to die in their sleep unless they forward it to a billion other people.
  • You “reply all” on accident all the time and don’t understand privacy.

You tattle.

This isn’t first grade. You shouldn’t go around tattling on everyone and being extremely nosey. If someone is on Facebook, there is no need to run to your boss and behave like a child. No one wants to tiptoe around another coworker because they are afraid that one slight mistake or exaggeration may cost them their job. You might even be driving your boss nuts if you tattle too much.

Instead, focus on your own work and improving your own situation.

What can you not stand in your office? Tell us your funny stories!


Image via Flickr by Ali West