Neglecting your retirement savings as you start your own business is simply not an option. Instead, you must find ways to continue saving for retirement even as you struggle to create a business that sustains your income. Here are a few tips that will help you get on the right track.

Make sure you’re charging enough
Many people think that they simply need to replace their income from their former employer in order to be successfully self-employed, but that isn’t the case. Let’s say you made $50,000 working for an employer and your small business brings in $50,000. Since you now have to pay your own Social Security employer match, your own business expenses, your own vacation, sick and holiday pay and make all your own retirement contributions, you actually need to bring in much more than you did before. These additional self-employment expenses can easily account for 15% to 20% of your income, if not much more.

Put yourself on the payroll
By giving yourself a consistent weekly or bi-weekly paycheck, you can ensure that you maintain a regular budget and never miss a retirement plan contribution.

Choose a retirement plan
There are many retirement plans that a self-employed business owners can open including a SEP IRA, SIMPLE IRA or Solo 401(k).

• With a Simplified Employee Pension (SEP) IRA you can contribute up to 25 percent of your income each year (this cannot exceed $53,000 in 2015). These accounts are easy and affordable to maintain but for those who have other employees, the automatic vesting and requirement for employer contributions to employee accounts may not be a good fit.
•  The Savings Incentive Match Plan for Employees (SIMPLE) IRA allows for up to $11,500 in annual contributions for those who are under 50 and $14,000 for those who are over 50. If you have employees, you’ll also be required to match their contribution up to 3 percent of their pay.
• A Solo 401(k) is for business owners with no employees. It allows for contributions of up to $18,000 in 2015 ($24,000 for ages 50 and over) along with an employer match of up to 25 percent of compensation. Unlike the IRAs discussed above, you can also take a loan out of the individual 401(k).

At Kramer Wealth Managers, we can help you choose the best retirement account for your goals, income and business and help you manage the choices you make with your retirement savings. Contact us today to find out how to get started.