Retirement Breaks for Entrepreneurs

When your business is doing well, one way to save taxes at the last minute is to set up a retirement plan and make a deductible contribution. Often you can make the contribution after the year is over. There is a wide array of retirement plan options available to the self-employed. The trick is to find the plan that’s best for your situation. This article from Forbes.com presents the best options, including who each is good for and who it’s not the right choice. If your business is doing well and you’re looking for ways to maximize your retirement savings, take a look.

Egged on by economists and Congress, more employers are automatically enrolling workers into 401(k) plans. The self-employed, by contrast, must decide to save for retirement and then pick their way through a maze of different plans, each with its own benefits and gotchas. But there’s a payoff: They’re permitted to sock a lot more away on a tax-favored basis than ordinary wage slaves. For 2013 a 35-year-old entrepreneur who nets $150,000 can shelter $47,500 in a solo 401(k). A 35-year-old employee earning $150,000 can contribute $17,500 to a 401(k), plus whatever her company deigns to kick in–$6,000 with a typical 4% company match, for a total of $23,500.