Retirement Plans

Will you be ready for retirement?

Everyone grows old. It’s inevitable. The question is, will you be ready when retirement gets here? We all know it’s coming, but unfortunately, few of us are adequately prepared for its arrival. There are several things we can do to prepare for retiring, even if that fateful day is looming larger in the immediate future than is truly comfortable to consider.

California Health Insurance - retirement plans

When making your retirement plans you have to consider several things. First, why am I planning? What is your motivation, reason for planning? Also, what plans are out there? There are many paths to the same goal. Finally, of those paths, which one is right for you?

Why should I plan?

You might be thinking, why should I think about retirement now? I’m young and fit, I can think about it later. This procrastination can be a costly and financially dangerous mistake. Everyone should be looking to the future and planning for the day that they will no longer want or be able to work to earn a livelihood. The fact is, average life expectancy in the US is 78.2 years. Most people will retire well before that age.

Furthermore, those individuals who think Social Security will be enough are fooling themselves. That program was never intended to and never will take the place of good retirement planning, for employer or employee. There will always be a need to supplement this government provision. Individuals who plan their retirement are able to supplement this base income with other sources that greatly improve income potential over the course of a retirement.


A good idea for you and for your business

If you’re self-employed or have your own business, you can have a small business retirement plan. It’s a great way to save for your own future, get tax breaks for your business and offer competitive employee benefits. Start by selecting the right small business retirement plan for you. 

Individual 401(k)
An individual 401(k) has many of the same benefits as a traditional 401(k) but costs less and requires much less administration. Substantial pre-tax salary deferrals and profit-sharing contributions make building your retirement savings faster and easier. This could be the right choice for you if you don’t have any employees other than your spouse.

A SEP-IRA (simplified employee pension plan) is one of the easiest small business retirement plans to set up and maintain. There’s little administration for you to do, and tax filing isn’t required. This could be the right choice for you if you want to make sizeable retirement plan contributions for yourself and any eligible employees. 


Personal Defined Benefit Plan
A personal defined benefit plan targets a desired level of retirement income and allows you to save aggressively to get there. Contribution amounts are adjusted each year to help you reach your goal. This could be the right choice for you if you’re self-employed or a small business owner near retirement and can contribute at least $80,000 a year. 
Profit-sharing Plan
A profit-sharing plan is a qualified retirement plan that allows you to contribute for yourself and any eligible employee. This could be the right choice for you if you’re self-employed or a small business owner with employees and you want more control over vesting and employee participation.
A SIMPLE IRA is a low-cost plan that’s easy to set up. Eligible employees can fund their own accounts by way of regular salary deferrals; you make additional contributions to their accounts. This could be the right choice for you if you’re a small business owner with no more than 100 employees. 
Business 401(k) Plan
Appropriate for any size business, a 401(k) plan allows your company to enjoy an individually designed retirement plan. Employees can typically make larger salary deferrals than with other plans, and your business gets tax benefits. This could be the right choice for you if you want a customized company retirement plan.

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American Compensation Service, Insurance Services, San Ramon, CA