Retirement plan options for S-Corp

[CaptKB]

Hi Everyone,

I really like the new forum..seems even better than the old ATX site! I am new to ATX as I started during the tax year last year and have already renewed for the full season this year...Hope business grows!

I have a question about the best retirement plan(s) to set up for a single member S-Corp. Client wants to save as much money as possible...Also, what type of plan(s) would be best for an S-Corp with several shareholders. Please respond with a viewpoint of a corp with employees and without employees. Thanks for all of your comments...I know this is a very professional group!

[OldJack]

What you ask is a complicated subject depending upon many factors. It would be best if you would review the tables and charts on the subject in the Small Business Quickfinder Handbook, tab K, employee benefit plans.

[JohnH]

Agree with Old Jack.

Every situation is different and needs its own analysis.

As a general rule, I think a single-owner S-Corp should do a SEP in most every case. It's simple, flexible, and it can be done at very low cost. The only decision that really needs to be made is where to put the money, but that decision will have to eventually be made no matter what type of retirement plan is set up. The client can either go directly to a no-load, low-expense-ratio mutual fund with their equity portion, or they can pay an investment advisor who will frequently steer them to something that will usually sap away a large part of their earnings in fees & charges.

The situaiton is much more complicated when there are employees, especially if the client wants to fund their own plan to the max but doesn't want to do the same for the employees.