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Guest Article >Why Women Business Owners Need a Retirement PlanBy Nora Bethman, CEBS, QKA, ERPA, President, National Employee Benefits Services, Inc. Ms. Bethman is the owner of National Employee Benefits Services, Inc., a third party retirement plan administration firm in Lincolnshire, IL. She has over 20 years of experience as a qualified retirement plan administrator and specializes in finding and fixing problems in plan compliance. For assistance with your retirement plan, please contact her at info@nebspensions.com or 847-808-0940. It's a great thing to see more and more women owning their own businesses. Whether it's due to increasing and better opportunities, more education, lack of other available jobs in an economic slump, or flexibility to coordinate with family obligations, more women than ever are starting and running their own businesses. According to a 2012 survey by American Express Open Forum, there are more than 8.3 million women-owned businesses in the United States, up 54% over the past 15 years. In running their businesses, women are negotiating with vendors, keeping track of cash flow, interviewing prospective employees, and the myriad other tasks needed to keep a business of any size running smoothly and staying profitable. But the one thing that tends to get neglected in the daily activities of solving problems, winning new business and trying to stay one step ahead of the competition is the company retirement plan. It's an overhead expense and there's a long time until retirement. Let me list a few facts that will move the retirement plan higher up the priority list. According to the Employee Benefit Research Institute (EBRI), a well-respected foundation devoted to the study of trends in employee benefits, "Poverty rates for women 65 and older were nearly double those of men in the same age group in almost every year from 2001 to 2009." In 2009, the most recent information available shows 13 percent of women age 65 and older lived in poverty. Women tend to live, on average, nearly five years longer than men. And among racial and ethnic groups, Hispanics had the highest life expectancy (81.4), followed by non-Hispanic whites (78.8) and non-Hispanic blacks (74.8.)1 Never in recent history has there been the "perfect storm" of factors converging -- increasing life expectancies, particularly among women, coupled with a global economic slowdown, and the prediction that the Social Security System in the U.S. is projected to become unsustainable at current levels. That's why women need more money to sustain a longer life in a comfortable manner. It's critical to start saving now. Many women rely on their husband's retirement savings, but divorce, unforeseen health problems, death, or prolonged job loss can deplete those retirement savings. So what's a woman to do? Get her OWN retirement account. Almost anyone can open an Individual Retirement Account (IRA). Even women who are not working can have a Spousal IRA in their own name. For employed women who have a 401k or other type of retirement plan at work, I would encourage women to find out about the details of the plan. If it's a contributory plan, like a 401k plan, which allows employee salary deferrals to be withheld from paychecks and put into the plan, I would urge women to sign up when offered a chance, and contribute as much as possible. But for women who own their own businesses, there are many choices of company retirement plans available to contribute the maximum allowed by law, in addition to receiving substantial tax deductions for plan contributions. The IRS even allows small businesses which have not maintained a retirement plan previously during the last three years and have less than 100 employees a credit of up to $500 for each of the first three years of plan operation. With so much tax assistance, it is almost costlier for a small business to NOT maintain some type of qualified retirement plan. And for women, setting up and contributing regularly to a retirement plan is one of smartest business decisions you'll ever make. 1. National Center for Health Statistics, April 2013 ### 401khelpcenter.com is not affiliated with the author of this article nor responsible for its content. The opinions expressed here are those of the author and do not necessarily reflect the positions of 401khelpcenter.com. This article is for informational and educational purposes only and doesn't constitute legal, tax or investment advise. | ||||
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