hi,
my wife is a solo practioner and does not have a retirement plan on her own. she wants to start one and does not know how to go about setting up one.
1. it is a S corporation
2. she has 4 full time employees who have been there less than 2 years.
3. she wants to maximise her contributions and keep the expenses and contribution to others low.
4. we are concerned about the cost of setting a plan and implementing it year to year.

i would appreciate any advice.
thank you
nandeesh

Zip Code: 95355

We wrote about retirement plans for self-employed individuals last July. You can find that article at: http://www.mdtaxes.com/news0706.html. While the maximum contributions might have changed a little from 2006, the percentage of your income that you can put away, as well as the rules for eligibility and matching for you staff, hasn't changed.

You should probably consider the SIMPLE IRA or a Safe Harbor 401k. Each of these plans put the bulk of your employees' retirement savings on their shoulders. If you're older than your staff, there are more sophisticated profit sharing plans you can add to your company's 401k plan, call "new comparability plans", which allow you to allocate a larger percentage of your profit sharing plan contribtion to your own account.

Finally, don't overlook that certain types of plans protect your assets better than others. My understanding is that you get more protection with a 401k than you would with a SIMPLE IRA, but that's a question for your lawyer. And I'm not a lawyer.

Zip Code: 01801