08-15-2019 Columns


As a business owner, you can’t afford to ignore your competition. You can’t afford to miss out on the trends affecting your industry. You can’t afford to alienate customers. And here’s one more item to add to the list: You can’t afford not to create a retirement plan for yourself. Of course, you might think that, one day, you’ll simply sell your business and live off the proceeds. But selling a business isn’t always simple, and there’s no guarantee you’ll receive enough to pay for a comfortable retirement – which is why you should strongly consider creating a retirement plan now. Here are some of the most widely used plans: SEP-IRA: You can contribute up to 25 percent of your compensation — as much as $56,000 in 2019 — to a SEP-IRA. Your contributions are tax deductible and your earnings grow tax-deferred until withdrawn. This plan offers you significant flexibility in making contributions for yourself and your employees. Plus, as an employer, you can generally deduct, as business expenses, any contributions you make on behalf of your plan participants. SIMPLE IRA: In 2019, you can put in up to $13,000 — or $16,000 if you’re 50 or older — to a SIMPLE IRA. As is the case with the SEP-IRA, your earnings grow tax deferred. You can match your employees’ contributions dollar for dollar, up to three percent of compensation. If you work for yourself, you can combine employee and employer contributions, so if you use the three percent matching rule, and you earn enough to fully match employee contributions, you can put in up to $26,000 per year (or $32,000 if you’re 50 or older). Alternatively, you could contribute two percent of each eligible employee’s compensation each year, up to a maximum of $5,600, regardless of whether the employee contributes. Contributions to your employees are tax deductible. “Owner-only” 401(k) plan: If you have no employees other than your spouse, you can establish an “owner-only” 401(k) plan, which functions similarly to a 401(k) plan offered by a large employer. Between salary deferral and profit sharing, you can contribute up to $56,000, in pre-tax dollars, to your owner-only 401(k), or $62,000 if you’re 50 or older. Like a SEP-IRA and SIMPLE IRA, a 401(k) provides the potential to accumulate tax-deferred earnings. However, you could choose to open a Roth 401(k), which can be funded with after-tax dollars. With a Roth 401(k), your earnings can grow tax-free, provided you’ve had your account at least five years and you don’t start taking withdrawals until you’re at least 59-1/2. Which plan is right for you? The answer depends on several factors, such as whether you have any employees and how much money you can contribute each year. But all the plans mentioned above are generally easy to establish, and the administrative costs are usually minimal. Most important, any one of them can help you build some of the resources you’ll need to enjoy the retirement lifestyle you’ve envisioned. To select an appropriate plan, you may want to consult with your tax and financial advisors. In any case, don’t wait too long. Time goes by quickly, and when you reach that day when you’re a “former” business owner, you’ll want to be prepared. This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Energy

Last week, the House and Senate hosted a joint Energy Committee where we heard a presentation from the Chairwoman of the Michigan Public Service Commission on the Michigan Energy Assessment report that was ordered by the Governor. I appreciate the work that was put in by the MPSC; however, serious concerns were raised by the Committee about the supply of energy needed to ensure that Michigan residents have continued access to safe and reliable power. An issue that has turned political is Line 5. In the Committee, the question was asked what the contingency plan is for residents of Northern Michigan and the U.P. in case the Governor and Attorney General rip out Line 5. The answer – trucks. Back in 2013, Line 5 and several other service lines were shut down due to maintenance. During this time, the price of propane soared to well over $5/gallon. Like many residents of our community, my home is heated by propane because I don’t have access to natural gas. If the price of propane jumped as high as $5/gallon, I don’t know how many of our residents could afford to heat their homes. When proposals are floated to remove Line 5, they usually include a false narrative that renewable energy sources can fill in the gap left in Line 5’s wake right now. Diversifying our energy portfolio is important, but we aren’t there yet technology-wise for renewables to provide baseload power. Renewables are an answer to future energy demands, but right now, they aren’t viable to be a sole source of power for thousands of Michiganders. Michigan’s energy needs shouldn’t be a political game. I look forward to continuing my work as the Vice-Chair of the Energy Committee to ensure that our State has a robust and diverse supply of energy and that we continue to innovate and embrace new and emerging technologies. If I can ever be of assistance to you, you can reach me at 517-373-1403 or PaulineWendzel@house.mi.gov.

‘Be a Senator for a Day’ essay contest

One of the joys I get out of serving as your state senator is to be able to connect with young students throughout Southwest Michigan.

As families and students prepare for the new school year to begin, I am excited to announce a new essay contest for incoming third through eighth grade students. The chosen winner will get to join me at the Capitol in Lansing to serve as a junior senator for a day.

To participate, entrants should submit a one-page essay answering the following question, “If you were a state senator, what is the first thing you would do to improve Southwest Michigan?”

The contest is open to all third through eighth grade students residing in the 21st Senate District and ends on Sept. 13. Completed essays should be submitted by email to SenKLasata@senate.michigan.gov or by U.S. mail to Sen. Kim LaSata, P.O. Box 30036, Lansing, MI 48909. Students should include their name, address, school, grade, and parents’ names and contact information.

Please email or call my office at 517-373-6960 with any questions about the contest.

As a parent and former teacher, I appreciate the unique ideas that young people have, and I look forward to reading all the submissions and highlighting the notable academic talent from our part of the state. Good luck!

As always, residents can contact my office with any state or local issues by calling (517) 373-6960 or emailing senklasata@senate.michigan.gov.

Vaccines during pregnancy

Vaccines are an important part of planning and having a healthy pregnancy. If you are planning a pregnancy, check with your doctor to make sure you are up-to-date on your vaccines. If you are currently pregnant, doctors and midwives recommend you receive two vaccines during your pregnancy: Tdap to help protect against whooping cough and the flu shot to help protect against influenza. If you are in the pregnancy planning stages, you may need to receive some vaccines. Your doctor may need to give you vaccines several weeks before you become pregnant because it could take a while for your body to build up disease protection (immunity) after getting the vaccine. Some vaccine-preventable diseases, such as rubella, can lead to serious complications, including birth defects. You should not get the vaccine to prevent rubella if you are currently pregnant. Therefore, planning ahead is very important. During your pregnancy, you should receive vaccines against both the flu (if you haven’t already received the vaccine during the current flu season) and whooping cough (pertussis). These vaccines not only protect you by preventing illnesses and complications, but they also pass on some protection to your child. You can rest assured that these vaccines are very safe for you and your baby. Millions of pregnant women have safely received flu shots for many years, and CDC continues to gather data showing that the flu shot is safe and effective during pregnancy. The whooping cough vaccine is also very safe for you and your baby. Getting the vaccine during your pregnancy will not put you at increased risk for pregnancy complications. For more information, visit www.bchdmi.org or call 269-926-7121.

Protecting our Great Lakes for future generations

Anyone who has grown up near the Great Lakes knows what a national treasure they really are, and it is our obligation today to do everything we can to protect these lakes for the generations of tomorrow. That’s why I have recently introduced two important bills in the Congress. The first bill is the Great Lakes Coastal Resiliency Act, which would require the U.S. Army Corps of Engineers to carry out the Great Lakes Coastal Resiliency Study. This study would assess threats and resiliency measures for coastal communities along the Great Lakes. It is so important to ensure our 5,200-mile coastline is protected because of the four million people who call the coastline home, the 60 commercial harbors that create incredible economic activity, and the billions of dollars generated from tourism. The Great Lakes Resiliency Study will provide a clear road map for our efforts to protect the Great Lakes moving forward. The second bill – the Great Lakes Restoration Initiative Reauthorization Act – would reauthorize the GLRI for another five years when it expires at the end of FY2021. The GLRI provides critical funding to maintain our beaches, shorelines and natural waters, improve water quality, fight invasive species, and restore the ecosystem. To learn more about other important legislative issues, follow me on Twitter at @RepFredUpton or visit my website: upton.house.gov. You can also call my offices in Kalamazoo (269-385-0039), St. Joseph/Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).

0 comments