As the April 17 deadline for tax filing looms (we get 2 extra days this year), it’s time to make sure that you have been funding your retirement plan. Some, such as a SEP and IRA, require a contribution by April 17. Ideally, you have been putting money in every month with your payroll cycle – automatic drafts are a wonderful thing. Many retirement plan managers offer incentives if you sign up for the monthly draft, such as lower minumum initial deposit. Even at $50 a month, this adds up over the years and is not something to dismiss.
After April, and after the accounting profession goes on vacation,
make plans to review your retirement plan with your accountant, financial planner/advisor (if you use one), and attorney, if you have a more complex or a group plan. A one hour annual meeting to review where you’ve been, the performance over the year, and your changing needs – and ability to invest – are an important check point as part of the management of your practice. If you have a group plan, this kind of meeting may be required (in one form or another).
If you haven’t started a retirement plan yet, for any number of reasons, start now. Even a personal IRA is a start. For your employees, even the ability to make automatic contributions through the payroll service is a big incentive. I work part time for a company that has a 401K plan, but they don’t contribute to it. However, they are using a plan manager who has done well in the past two years. For me, access to that kind of management is worth money, even though it’s not hard cash in my 401K. I value it though, and value continuing to work for the company in spite of some recent changes.
We’ll talk more about retirement planning in this blog over the next few months.