A 457 retirement plan offers employees of state governments, subdivisions of state governments or certain eligible key employees of non-profit organizations to save for their retirement now and pay taxes later by contributing a portion of their salaries to the plan.

I’m gonna touch on 6 things about the plan which I think is pertinent for you to know if you’re participating in this plan.

1. How Much You Can contribute on a Tax-Deferred Basis

You may contribute the lesser of $15,500 or 100% of compensation.

If you’re eligible for catch-up contribution, then you can contribute an additional $5,000 to make a total of $20,500.

2. How Are The Contributions Invested

The money you contribute is invested at your direction in one or more of a variety of investment options offered by the plan.

Many 457 plans offer both fixed and variable investment options.

The fixed options which are through bank and insurance company products guarantee principal and interest.

The variable options which are through insurance company products, bank products or mutual funds provide “variable” returns, which are not guaranteed.

Your employer determines the investment options available to you and the options may change from time to time.

3. When You Can Withdraw The Money You Have In Your 457 Retirement Plan

You can withdraw the money upon:

Your retirement Your encountering of emergency Reaching the age of 70

Small business owners, whether incorporated or not, have a number of retirement plan options available. If you are considering starting a retirement plan, you should first learn about the kinds of plans available to you. In this article, we’ll discuss two popular retirement plans used by small businesses and the benefits of each.

One of the most popular is the SEP or Simplified Employee Pension. You can contribute 25% of your compensation up to $45,000 for yourself. Of course, you must make a similar contribution for any employees you have. In other words: if you make a 25% contribution for yourself, you must make a 25% contribution for your employee(s) based on their salaries. The benefits:

You can still set up, make a contribution and get a tax deduction for 2007 as long as it’s done by your tax filing deadline. SEP plans have the least paperwork and reporting requirements of any plan, making it easy to set up and administer. You decide whether to make a contribution year-to-year giving you some flexibility in an economic slowdown.

Another popular plan – especially if you have employees – is the SIMPLE IRA or Savings Incentive Match Plan for Employees. The benefits:

A SIMPLE plans allows for payroll deductions by employees – $10,500 in 2007 with a catch-up provision for those over age 50. Employee contributions are matched, usually dollar for dollar of the first 3%. In other words…you are only providing a contribution for those who choose to participate. No annual filing requirements and most of the paperwork is handled by the bank or financial institution making the investments for you and your employee(s).

For more detailed information on retirement plans, including rules for setting them up, the IRS offers a free CD-ROM called “Individual Retirement Arrangement Resource Guide for Small Business Owners and Individuals”. You can order a copy at www.irs.gov/retirement (the fastest way to find it on the website is to type IRA Resource Guide for Small Business Owners in the search box). Also check out IRS Publication 560 – “Retirement Plans for Small Business”.

There are significant tax benefits to any retirement plan. They include the fact that contributions are tax deductible and contributions plus earnings grow without taxation until they are withdrawn. Of course, there are drawbacks as well. To name just two: plan assets are illiquid and there is a substantial penalty (10% plus tax) for early withdrawal.

In addition to helping your business, yourself and your employees, recent tax law changes have handed out more incentives to establish a retirement plan. They include:

Contribution limits that increase regularly allowing you and employees to set aside every larger amounts for retirement. Catch-up provisions that allow employees age 50 and over (including yourself) to side aside additional contributions. Tax credit for small employers that may enable you to claim a tax credit of 50% of the cost of setting up and administering a SEP or SIMPLE IRA plan. There is a maximum cap of $500 per year for each of the first 3 years of the plan. As exciting as this sounds, it’s very unlikely that you’d ever get to use it since these plans typically don’t involve a fee for set up and administration. Tax credit for certain low and moderate- income participants (including the self-employed). The amount of the credit is based on the contribution made and the credit rate. The maximum contribution eligible for the credit is $2,000. The credit rate can be as low as 10% or as high as 50% depending on adjusted gross income. Talk with your tax advisor for more information.
Take Away Wisdom

As a small business owner, there are lots of really good reasons to have a retirement plan. The type of plan you choose is based on your business and personal situation. You may want to talk with your tax advisor or give me a call and we can flesh-out which plan is appropriate for you. However, if you are looking for a tax deduction for 2007

As a small business owner, there are lots of really good reasons to have a retirement plan. The type of plan you choose is based on your business and personal situation. You may want to talk with your tax advisor or give me a call and we can flesh-out which plan is appropriate for you. However, if you are looking for a tax deduction for 2007 – your only option may be a SEP Plan.

As a general rule, banks and other establishments withhold loaning large sums of money to people who have had bad credit or poorly managed financial history. Successful people can come across as having few cares in the world as the result of receiving substantial salaries that enable them to live comfortably and obtain whatever creature comforts desired.

However, not everyone lives in financial comfort. In fact, there are hundreds of people who live from paycheck to paycheck and struggle just to make ends meet.

Those who find that they cannot always stretch their money to their next paycheck often slip into despair and end up accumulating debt which might exceed have the available means.

Cash advances can be obtained for such situations but before a person begins the search and application process, one should equip themselves with a plan that will help to secure a stable financial future.

There are some unsecured loan lenders who can get money out very quickly, but most need a few days for approval and to review the application. Those with bad credit are able to apply for a cash advance despite the lack of employment.

People who are in need of money quickly can feel secure in knowing that there are services that will allow them to get money when they need it. Commonly, banks try to avoid offering an unsecured high risk loan to those with poor or no credit as there are no assurances as to when or how much will be paid back.

Proof of assets is a common requirement for an approval on a loan, but not everyone can claim ownership of a house or dwelling place, however, despite in some situation, proof of assets is not as important of an issue as meeting a down payment.

Financial establishments do have, as a general rule, guidelines and requirements that applicants are required to meet before they are approved for a loan. The proof of proper collateral is usually required as an assurance that the one applying for the cash advance will pay the debt off in full within the time required.

However, despite the fact that many banks avoid approving loans to those who are categorized as high risk, approval is still granted in some situations. An unsecured high risk loan is aptly named as financial establishments literally take a risk when approving such people, as occasionally there are no guarantees as to whether or not the loan will be paid back in full.

Improvements have been made in the financial industry that has made the task of obtaining significant cash advances more accessible to those in need. Several institutions offer reasonably priced down payments and compensate with higher interest rates.

Due to the lack of assurances that a person will be able to pay back an unsecured high risk loan in full, such loans come with some disadvantages. High interest rates are a common drawback however one that should not come with too much surprise.

Once a person has been approved they must put money down and because of the riskiness the down payments are most often rather steep. While a person can in some situations, be approved easily, one must provide sufficient funds to cover all subsequent payments thereafter.

The advantages to such a loan can outweigh the disadvantages, but wise choices must be made in order to make sure that applicable advantages are obtained. One advantage is that a person can pay this loan back in installments.

Those who are interested in applying for an unsecured high risk loan would greatly benefit from performing sufficient research into loan possibilities available to them.

Before dealing potentially risky cash advances, applicants should have or at the very least be aware of, ways in which payments will be made. People who are in need of cash fast and are familiar with the Internet can find a plethora of information that will help in the decision of the best loan to apply for.

Many sites offer information, however, not all the details are spelled out before a person fills out and submits an application. Before embarking on a path where the future is uncertain, the proper preparation is required in order to help ensure success.

Those who find themselves in a situation where they have the need to consider applying for such a loan should only do so if they have a well thought out plan for how they will cover the potentially high down payment and subsequent costs.