While establishing a retirement plan for your practice can provide a number of near- and long-term benefits, it is wise to look at a number of factors to determine which plan best suits your personal and practice objectives. Oftentimes, plan sponsors will implement plans without considering the costs and liability to the employer of doing so. Retirement plans have specific requirements related to factors such as eligibility, employer contributions, vesting, and compliance tests, among many others. All these items should be part of a discussion you have with plan providers that you are considering working with.

The initial question, however, is why do you want to set up a plan in the first place? Is it primarily to accelerate your personal retirement planning, or is it to provide an additional benefit to staff or to attract and retain employees to help build a profitable practice?

While these might sound like simple questions, the fact is that they can have more than just a single answer. Getting to understand the various types of qualified plan options that exist will help guide you to the type of plan that is best for you. SIMPLEs, SEPS (Simplified Employee Pension plans), 401(k) profit sharing plans, Defined Benefit, and Cash Balance plans all have their place. And what might sound like the best fit for you today may not be in the future, since your personal objectives and employee populace change over time.

It is also important to know that setting up a retirement plan gives you some additional roles, like plan fiduciary and trustee, along with new fee-disclosure rules that you will need to understand beginning next April. Spending some time to learn more about the points covered here will go a long way towards establishing a successful retirement plan for you and your employees.

Tom Zgainer, Senior Vice President of Sales for ExpertPlan Inc, has helped more than 2,200 small businesses with their retirement plans over the past decade.