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Retirement Savings Options for Small Business Owners

Setting up a tax-advantaged savings plan similar to one offered by a large employer is an essential step for small business owners and their employees to accumulate enough savings to last through retirement.

s a small business owner, you have a number of options to save for retirement, including an Individual 401(k), a SEP-IRA, a SIMPLE IRA, and a full-service 401(k) for small businesses. Even if you are close to retirement or expect to continue working part time, tax-advantaged savings can play an important role in helping you reach your retirement income goals. All investment earnings in a retirement plan are tax-deferred (or tax-free for Roth accounts) until you withdraw them.

Retirement Savings Options for Small Business Owners

GETTING STARTED
Setting up a small business retirement plan is easy. Depending on the plan you choose, you and your employees can enjoy tax-advantaged savings, plus a broad range of investment choices.

Immediately below are highlights of the full-service T. Rowe Price 401(k) for Small Business. The chart further below gives an overview of three smaller plan offerings from T. Rowe Price.

T. Rowe Price 401(k) for Small Business

  • This plan is generally for employers with fewer than 1,000 employees who wish to offer a cost-effective 401(k).*
  • The plan allows for both employee and employer contributions, permitting the sponsor and participants to maximize tax deductions and tax-deferred savings.
  • Salary deferrals are up to $17,500 for 2013; $23,000 if age 50 or older. Employer contributions can be made in conjunction with salary deferrals. The maximum that can be allocated to a participant for 2013 is $51,000, which includes employer contributions (and forfeitures) and employee contributions (excluding catch-up contributions).

* T. Rowe Price also offers 401(k) services to larger businesses with over 1,000 employees.

T. Rowe Price Small Business Retirement Plans at a Glance

This comparison chart can help you get a quick, clear picture of some of the advantages and requirements of the plans available, in addition to the 401(k) plan for small business.

T. Rowe Price Small Business Retirement Plans at a Glance

*The maximum deductible contribution for federal income tax purposes.
**Maximum amount of compensation that can be used in determining contribution is $255,000 for tax year 2013. This amount is increased periodically for inflation.
***May be as low as 1% in no more than 2 years out of 5 consecutive calendar years.
The $20 account service fee will be waived for the following circumstances: subscribe to electronic delivery of statements and confirmations (participants can subscribe to paperless delivery via the T. Rowe Price website once their account is established), maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, variable annuity, and small business retirement plans); or qualify for
T. Rowe Price Select Client Services based on higher asset levels of $100,000 or more. If the Participant Account is closed during the year, a $20 closeout fee will be deducted automatically from the proceeds of the total redemption. However, the closeout fee is waived when an account service fee was previously assessed to the participant for that year or when the proceeds are being used for a rollover, transfer, or conversion to a T. Rowe Price retirement plan account or T. Rowe Price IRA.
††Contributions may or may not be tax-deductible.

T. Rowe Price Small Business Retirement Plans at a Glance

This comparison chart can help you get a quick, clear picture of some of the advantages and requirements of the plans available, in addition to the 401(k) plan for small business.

*The maximum deductible contribution for federal income tax purposes.
**Maximum amount of compensation that can be used in determining contribution is $255,000 for tax year 2013. This amount is increased periodically for inflation.
***May be as low as 1% in no more than 2 years out of 5 consecutive calendar years.
The $20 account service fee will be waived for the following circumstances: subscribe to electronic delivery of statements and confirmations (participants can subscribe to paperless delivery via the T. Rowe Price website once their account is established), maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, variable annuity, and small business retirement plans); or qualify for T. Rowe Price Select Client Services based on higher asset levels of $100,000 or more. If the Participant Account is closed during the year, a $20 closeout fee will be deducted automatically from the proceeds of the total redemption. However, the closeout fee is waived when an account service fee was previously assessed to the participant for that year or when the proceeds are being used for a rollover, transfer, or conversion to a T. Rowe Price retirement plan account or T. Rowe Price IRA.
††Contributions may or may not be tax-deductible.

click here ONLINE: Click here to view our Small Business Retirement Plans.

BY PHONE: Call 1-800-401-1819 to speak with an investment guidance specialist.


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