[Mac]

I was talking with my accountant the other day discussing some things my cash flow statement told me when I asked him what the best thing to do with extra money is. My Roth IRA continually gets maxed every year so the next option he suggested is setting up a simple IRA in my company where the company contributes a percentage to any employees who choose to participate and I get to put an extra $10k/yr into retirement.

Does anyone else offer such a program within their company and if so, what percentage of your employees participate? Do you advertise this when you have openings? Think it even matters to the guys?

Truly, employees are not the reason im doing this but it is on my radar screen since it will now become an expense it anyone chooses to take their free money from me.

[MLysiak]

I have a simple IRA set up for the same reasons. Mine is set up so employees only qualify for employer contributions after they have worked for me for at least one year. (seasonel or part timers dont qualify) I need to offer all qualifying employees this program once a year. In 10 years, 6 -8 have qualified but, not one employee has taken advantage of this offering. If and when they qualify and sign up, I have to match their contributions of up to 3% of their annual pay which is about $700. -$800. per year per qualified employee. By offering a simple to my employees, I can contribute to my own account about double what I could with a traditional IRA.

[johnkeegan]

I had a Simple for a few years but I recently switched to a 401K. They're alot easier to set up and run as compared to the old 401K's (which is why I originally did a Simple).

...Bottom line is you can put ALOT more into your 401K's than you can a Simple..with alot more options.

(PS- I know that this year and next are the best times to convert to a Roth, if anyone has yet to do so.)

[natural12]

I also have a simple. My thoughts basically echo mlysiac. I have given my employees the option after 1 year but they have declined. If your employees chooses to participate I don't think it will cost too much out of pocket. You will have to set up an account to send the funds too. Once it is set up it is his/her account, and he can manage it as he pleases. I use TD ameritrade. Pretty easy set up and costs very little.

The form is confusing as hell. It gives you a couple of options to offer your employees. It is written in bizarre tax lingo.

Bottom line it is a good choice. You can contribute a max of 10k plus 1-3% of your income. You get to choose the percentage. Which ever you choose that would also be the matching percentage given to your employees.

Also, it is tax deductable which I am sure you are aware of.

I did not set up a 401 because I heard it was a nightmare with the forms. Perhaps things have changed for the better. If so I would look into that as well since you probably have the option for a larger contribution.

[mybigdog1]

are you talking about a sep ira simplified employee pension program.

As far as I understand them and I do not claim to know it all.

Allows you to contribute the most money possible.

As an employer you are required to contribute to any employees who have worked for you in the previous 2 years from the start of the sep *even if they do not contribute themselves. ( * I believe)Also you need to match the same percentage of your employers salary as you contributed for yourself.

[Mac]

Originally Posted by mybigdog1

are you talking about a sep ira simplified employee pension program.

As far as I understand them and I do not claim to know it all.

Allows you to contribute the most money possible.

As an employer you are required to contribute to any employees who have worked for you in the previous 2 years from the start of the sep *even if they do not contribute themselves. ( * I believe)Also you need to match the same percentage of your employers salary as you contributed for yourself.

I do believe that is exactly what I am talking about.

[natural12]

The SEP and the simple are two different plans.

http://www.irs.gov/pub/irs-pdf/p560.pdf

Mac if you are planning on setting up the simple this year I believe the cut off date is Oct 1.

[Mac]

Yeah, I know the cutoff date is closing in. Im kinda ticked w. my accountant. He is also a broker and was going to set this all up for me and set me in some funds but I aksed the magic question - these are no load funds, right? Well, no I have to be paid so these are about 5% front load. WTH? Sorry buddy, you can stuff it. I will see what vanguard can do for me and if im too late - oh well. There is always next year.

[mybigdog1]

sep is easy to set up no filing whatsoever. we also used vangaurd one of the lowest fees .

[natural12]

Yeah don't fall for the front end or back end loaded funds. Their are plenty of good no load funds to choose from.

If you are willing to do the homework you can set up an online account like Ameritrade and create your own portfolio. It's easy and inexpensive.

If you need advice you could probably find an adviser that would charge by the hour.