Jul
7
2014

Practice owners have a lot on their minds. There are all the administrative tasks managing a practice entails: billing, collections, keeping accounts, payroll, taxes, and so forth. There's marketing and selling. Hiring and supervising employees. And a thousand more.

As tough as it is to keep on top of all these matters, many women who own practices have an additional set of responsibilities: caring for their homes and their families. Often, women will put the needs of others ahead of their own and neglect preparing for their own futures.

If you're a practice owner and haven't made provisions for your retirement, it's time to move it off the back burner. Tax law may contain new opportunities to save money for retirement while deferring on taxes. The sooner you start saving for retirement, the more you'll have when the day comes. After all, you work hard to make your practice a success--make sure your practice works just as hard to make your retirement as success.

Retirement planning options for the owner-only practice
The bad news about a one-person practice is that it will support you only as long as you continue to work. The good news is that there are several excellent retirement options that make sense for a one-person practice, including SEP-IRA, SIMPLE IRA, profit-sharing plan money purchase plans, and Owner's 401(k) plans.

With an Owner's 401(k), you can put away far more for retirement than with other types of plans. Because it combines a profit-sharing plan and 401(k) provisions, the Owner's 401(k) allows you to save up to the combined limit for each of these types of plans. This means you can save up to $52,000 in 2014 ($5,500 over and above if you are aged 50 or over) for yourself, plus additional savings for a spouse or certain family members who may work for you. It covers only the owner(s), their spouses, and their family members, so it is not appropriate if there are common law employees. Not only does the Owners 401(k) enable you to save more for retirement, but it also further reduces your taxable income, saving you money now.

Choosing among different types of retirement plans
If you have employees and wish to save for your own retirement, you will generally need to cover your qualified employees as well, although some types of plans permit you to specify whether part-time or new employees are eligible. There are advantages and disadvantages to each type of plan, so you should talk to a financial professional as to which type of plan is most suitable for your situation. Here are some questions you may want to consider when you consult with a financial professional:

  • How complicated and/or expensive is this plan to set up and maintain? Some plans require more paperwork than others, including annual filings. The simplest plans to administer include the SEP-IRA, SIMPLE IRA, and Owner's 401(k).
  • Which plans allow me to contribute the most to my own retirement account? The plans that allow the largest contributions include SEP-IRA, combined profit-sharing and money purchase plans, and Owner's 401(k).
  • Can I borrow from my retirement account? Some plans permit borrowing, depending on the provisions of the plan and up to certain limits. These include profit-sharing, money purchase, Owner's 401(k), and defined benefit plans.

Whatever retirement plan you establish, the important thing is to begin saving for retirement now. Put it at the top of your "to-do" list!

Call a retirement program specialist at 800-523-1125 to discuss your retirement needs or to learn more about our comprehensive retirement solution offerings. Or, visit axa2plan.com and schedule a retirement planning consultation. AXA Equitable has been an AAHA Preferred Provider, offering retirement solutions, since 1995.

 

AXA Equitable Life Insurance Company (NY, NY) does not provide legal or tax advice. Withdrawals from tax advantages retirement plans are subject to ordinary income tax treatment and if taken prior to age 59 ½ may also be subject to an additional 10% income tax penalty.

GE – 95195 (06/14) (Exp. 06/16)

 

Add comment

  Country flag

biuquote
  • Comment
  • Preview
Loading

About this Blog

Red is your guide to everything AAHA. Whether you’re looking for association news, updates on our educational offerings, the latest books from AAHA Press, deals from our Preferred Providers, or fun reads from various AAHA staff and AAHA-member veterinary professionals, this is where you’ll find it.

Questions or comments?
Email us at aaha@aaha.org or call AAHA’s Member Experience Team at 800-883-6301.

AAHA-Accredited Veterinary Hospital Locator

Read the latest edition of:

Poll Question
Veterinary professionals: Are you allowed to bring your pet(s) to work with you?

The Standard of Veterinary Excellence ®
American Animal Hospital Association | Copyright ©2018 | Privacy Statement | Contact Us
The Standard of Veterinary Excellence ®
American Animal Hospital Association | Copyright © 2014
Privacy Statement | Contact Us