Are you ready to retire?

If you own a glass company, you have a lot to think about: sales, expenses, marketing, cash flow, competition; the list goes on. By spending so much time on the issues of today, you may overlook the concerns of tomorrow. That’s why, if you haven’t already done so, you need to choose a retirement plan for your business.

Which plan is right for you? It depends on different factors, such as how many employees you have and how much you can afford to contribute to a retirement plan each year. Let’s take a look at some popular retirement plans for small businesses.

Owner-only 401(k)
The owner-only 401(k) option is really good if you’ve worked for a larger glass company for years and have decided to set up shop on your own. Also known as an individual 401(k), an owner-only 401(k) offers many of the same advantages of a traditional 401(k): a range of investment options, tax-deductible contributions and tax-deferred earnings growth. You may even be able to choose a Roth option for your 401(k), which allows you to make after-tax contributions that can grow tax-free. In 2010, you can contribute up to $49,000 to your owner-only 401(k) or $54,500 if you’re 50 or older. To make deductible contributions for the 2010 tax year, you will need to set up your plan by Dec. 31, 2010.

Solo defined benefit plan
You may think you have to work for a big company to participate in a traditional pension plan, also known as a defined benefit plan, but you can set one up for yourself if you’re self-employed or own your own business. This plan has high contribution limits, which are determined by an actuarial calculation, and your contributions are typically tax-deductible.

SEP IRA
If you have just a few employees or are self-employed with no employees, and are looking for a low-cost, low-maintenance retirement plan, you may want to consider a SEP (Simplified Employee Pension) IRA. You fund the plan with tax-deductible contributions, and you must cover all eligible employees as employees themselves cannot contribute. You can contribute up to 25 percent of compensation if you’re an employee of your own corporation, or 20 percent of income if you’re self-employed, up to $49,000 annually. And you can fund your SEP IRA with virtually any type of investment you choose.

SIMPLE IRA
As its name suggests, a SIMPLE (Savings Incentive Match Plan for Employees) IRA is quite easy to set up and maintain, and it can be a good plan if your business has fewer than 10 employees. As the business owner, you must contribute in one of two ways: a dollar-for-dollar match of up to 3 percent of salary or a contribution of 2 percent of employees’ salaries, up to $4,900 per year. Employee contributions are tax-deductible, and your matching contributions are generally deductible as a business expense. Still, while a SIMPLE IRA might be advantageous for your employees, it’s less generous to you, as far as allowable contributions, than an owner-only 401(k), a defined benefit plan or a SEP IRA. For 2010, your annual contributions are generally limited to $11,500, or $14,000 if you’re 50 or older by the end of the year. You can also make a matching contribution of up to 3 percent to yourself.
To determine which plan is best for you, consult with your tax adviser and a financial adviser who has experience with construction small businesses. But don’t wait too long to get started; you’re moving closer to retirement all the time.