For Entrepreneurs A Simple IRA May Be Best
Q: I own a small decorating business and I’ll be the first to admit that I don’t know anything about taxes or retirement plans. I’d like to set up a 401(k) or
an IRA or some other kind of retirement plan for me and my three employees. What are the various retirement plan options available for a small
business owner and in your opinion, which would work best for me?
-- Wanda S.
A: Wanda, I appreciate your confidence in my humble opinion, but asking me for financial advice is like asking Donald Trump for a recommendation on
hair care products. I can tell you what works best for me and my business, but you’ll need to do your homework and seek professional advice to figure
out what would work best for you. As a side note, I hear that Donald Trump is coming out with his own line of hair care product soon to be called “Big
Head.” The formula is 1 mousse, 1 liquid nails, and 98 to air. It should be a big seller among the high brow, comb-over crowd.
Here’s my best advice on retirement plans: find yourself a financial advisor (or financial planner) who is has experience working with small businesses
and have him or her explain the options available and make a recommendation as to the type of plan best suited for you and your business. When I
say “financial advisor” I’m not talking about your know-it-all brother-in-law or your accountant. I’m talking about a broker or financial planner (or other
licensed professional) who has a proven track record of making his clients money and is an expert on IRAs, 401(k)s, mutual funds, etc.
The best way to find a good financial advisor is to ask for referrals from your most successful friends and associates. Find the richest, stingiest man in
town and ask who his advisor is. Meet with several advisors, explain your situation, and ask for their recommendations. You should also make sure the
advisor is a good fit for your personality and your business. If all goes well you will be doing business with this person for many years to come, so