[Chart 2]

“Thumbnail” Estimate of Business Owner’s Retirement Need

1.Choose desired annual retirement income.

2.From that amount, deduct Social Security ($10,000 if single/$15,000 if married)

3.Next, deduct annual pension payment (ignore 401K and IRAs)

4.Multiply the net amount X 14 to find the total savings needed.

Source: Business Digest, January 29, 2004.

[Chart 3 and call-out]

To enjoy those tax deductions, federal law makes you follow certain rules about including employees, limiting contributions for higher paid owners and restricting

Factors affecting the selection of a Qualified Plan

?Number of years until retirement

?Age owner expects to retire

?Number of employees and expected cost

?Successor management identified

?Cash flow and administrative costs.