Episode 21 - How a small business can start a retirement plan
The Money Pig podcast, sponsored by Goodwin Investment Advisory, discusses starting a retirement plan for small business owners and their employees. Wealth Advisor Justin Pitcock explains the benefits of offering retirement plans to attract and retain talent while also providing tax advantages for business owners. He explores different types of plans such as Sep IRAs and 401Ks, highlighting the simplicity of setting up a Sep IRA but recommending self-employed 401Ks for higher contributions. The Secure Act 2.0 introduces tax credits to incentivize small businesses to offer retirement plans, covering startup costs and potentially providing additional payments from plan administrators. Overall, the transcript emphasizes the importance of planning for financial security in both personal and professional contexts.
The Secure Act 2.0 Tax credit provides a contribution credit for small businesses with 50 or fewer employees who earn less than $100,000. The IRS reimburses the employer for the first contributions made to their employees' retirement accounts. The credit is phased out for businesses with more than 50 employees and completely phased out for those with 100 or more employees. This tax credit aims to help small employers provide benefits to their employees at no cost. It encourages businesses to establish retirement plans and offers reimbursement for startup costs. Gia, a financial advisory firm, helps small business owners set up these retirement plans and provides ongoing support in managing investment options and answering employee questions about the plan.