Are you a self-employed individual wondering how to create an effective retirement savings plan? You might be overwhelmed by the financial planning intricacies of tax codes and pension plans – but don’t worry; William Schantz is here to help.
s an experienced financial advisor with a background in helping small business owners and freelancers get ahead financially, he knows just what it takes to craft the ideal retirement portfolio for self-employed individuals.
William Schantz’s Take on Choosing the Right Savings Plan
Unsurprisingly, choosing the right savings plan for your future can seem daunting. With so many intricate details and factors to consider, it’s easy to become overwhelmed or confused when trying to figure out which option works best for you.
However, William Schantz has some advice that could help simplify the process and ensure you get the most out of your money — after all, financial security is important! Let’s look at what he says about finding a savings plan that works.
1. Traditional IRAs
Have you ever thought about planning for your retirement? Opening a traditional IRA is an excellent way to begin. Whether from taxable income or if you are self-employed, setting money aside in a traditional account can help when the time arrives.
Even better – once individuals have reached 59 ½ years old, they may start accessing their funds whenever needed! That said, after reaching age 70 ½, this becomes mandatory; however, any withdrawals will remain tax-free.
2. Roth IRAs
Thinking of investing for retirement but trying to decide which IRA to choose? A Roth IRA is a great way to go. Unlike traditional IRAs, you won’t get an upfront tax break; however, your withdrawals during retirement are free from taxes!
Plus, when you turn 70 ½, there are no required distributions like with other types of IRAs – so your savings can grow even more over time and generate even greater rewards.
3. SIMPLE IRAs
According to William Schantz, a SIMPLE IRA can provide a great retirement savings option for eligible self-employed professionals, independent contractors, and small business owners.
Contributions to the plan are made with pre-tax income, which means you get double benefits: tax deductions now plus no taxes on withdrawals in your golden years!
Keep in mind that if you withdraw early from a traditional IRA, there is an additional 10% penalty – but starting early from this type of account could mean up to 25%.
Ultimately it comes down to whether or not money needs to be taken out within two years after starting contributions toward your future security.
4. SEP plan
A SEP plan is an attractive retirement savings option if you’re self-employed.
With up to 25 percent of your net compensation allowed as contributions each year – and that money not becoming taxable until withdrawal – this type of IRA gives entrepreneurs the ability to make significant strides toward their financial future.
Setting up separate accounts for every participant also makes running these plans easier on small business owners than other retirement saving options, such as traditional IRAs.
William Schantz’s Final Thought
As a self-employed individual, you have unique retirement planning needs. You need to consider your income, taxes, and investment options carefully.
Fortunately, retirement planning experts like William Schantz can help you create a plan that meets your needs.