Tuesday, November 11, 2008

More research on retirement plans.

I’ve been interested in getting a retirement plan started since I converted over to my LLC. At the staffing agency I did open a 401k with them, but I only funded it for a short time. I’m also having an issue logging into the account online, but that’s not the point of this post, so I’ll stop before I begin to rant.

There are quite a few plans with each having benefits and drawbacks. SIMPLE IRA’s are simple, but from what I have seen, most companies that offer them charge quite a few fees. Then there are ones like traditional IRA, ROTH IRA, and self employed 401k.

I decided to go with a self employed 401k from Fidelity. While I probably didn’t do much research into the matter as I should have, I still think the self employed 401k is a good retirement plan to use that I can hopefully grow into throughout the future.

Main benefits:

– Yearly fund rates can be much greater than standard IRA plans. This has to do with how the plan works. Both the “employer” and “employee” can contribute to the account. According to Fidelity, the maximum for 2008 is around $46,000.
– At least with Fidelity, no annual maintenance fees.
– Both the employer and employee deferrals are tax deductible (assuming you are incorporated, otherwise only the employee part is).
– Fund the account whenever I want or am able to. This is a major plus right here. Actually this is probably the main reason I decided to go with it. Like some of the other IRA plans that require large initial deposits or monthly payments, this plan allows for the deferrals to happen when I decide. All I have to do is send a check to Fidelity with a form showing where to put the money.

I send off the papers to Fidelity and got one random fund prospectus in the mail so far. So that means pretty soon I should get the account details, then I can start funding it!

Comments are closed.