It is a fact that women own half of US businesses. In fact, women today are pursuing independent business ventures at twice the rate of men, with 9 million woman-owned businesses nationwide. Women have climbed the ranks within their professions to fill nearly half of middle or upper management positions in US companies. (The National Foundation for Women Business Owners, 1999, "Frankly Female," Key Femographics.^TM; The National Foundation for Women Business Owners, 1999, based on statistics from the US Bureau of the Census and the Small Business Association (SBA).; Women's Bureau of US Department of Labor Statistics, 1997.)

And that's not all. During an era of corporate downsizing, women are aggressively hiring new employees. In fact, female-owned businesses employ more workers in the US alone than all Fortune 500 companies worldwide — an estimated 27.5 million people. (The National Foundation for Women Business Owners, 1999, based on statistics from the US Bureau of the Census and the SBA.)

To maintain and boost these current successes, it's crucial for female business owners to keep up morale and job satisfaction among their employees. Providing a retirement plan can be a key factor in achieving this objective. And while female employers may offer flextime, tuition reimbursement, and profit-sharing, just under two in every ten provide 401(k) or other retirement benefits. (The National Foundation for Women Business Owners, 1998.)

Responsible Reluctance?
Why do so few female-owned businesses provide retirement plans? There are several reasons. In general, women tend to rely on Social Security and traditional company pension plans as primary sources of future income. In addition, like many entrepreneurs, female business owners utilize most of their resources to develop their businesses. Fearing insufficient capital to grow their business, they plow most of their earnings back into the business. Furthermore, many business owners have concerns about the costs, paperwork, and other hassles associated with funding a retirement plan. These reservations are not unfounded. Funding a retirement plan can be a costly, complicated endeavor.

Not always. A Simplified Employee Pension (SEP) can offer small businesses a "simple," convenient way to help employees prepare for a secure retirement. You should consult with your own tax and legal advisors to learn more about SEPs and the benefits they can provide.

SEPs: Simplifying the Retirement Saving Process
A SEP can provide business owners and their employees with many advantages. With minimal paperwork, business owners can enjoy tax advantages and still provide retirement benefits for their employees and themselves.

The way it works is fairly simple: An employer makes contributions on behalf of an employee's SEP-IRA (or his/her own, if self-employed). Tax benefits include:

• Employer contributions to a SEP-IRA are tax-deductible (within certain limits). (Note: The employer may vary the amount of these contributions from year to year.)
• Employer contributions are not currently taxed to the employee.
• Earnings accumulate in the account tax-deferred until they're withdrawn by the employee. (Note: a percentage of the annual contribution doesn't get siphoned off by taxes at the time it's made. Therefore, earnings over the life of the plan avoid current taxation. However, SEP distributions are taxed as received and withdrawals prior to age 59½ may be subject to IRS penalty tax.)

Other advantages that make SEPs attractive for small businesses:

• Contribution limits. Thanks to the Economic Tax Relief and Reconciliation Act of 2001, contribution and compensation limits for SEPs increase annually. Click here for a table of the annual limit increases.
• Control. Based on the options offered by the retirement plan, each employee determines where his/her funds are invested.
• Portability. The full value of the SEP stays with the employee in the event of a job change or early retirement.
• Full vesting. Employer contributions are 100% vested.

Annuities in Retirement Funding
What type of products can be used to fund a SEP? For employers looking for flexibility, a New York Life^SM annuity may be suitable. An annuity is a flexible, tax-deferred vehicle that can provide income during retirement. Features unique to annuities include:

• Guaranteed interest rate options with a fixed account;
• Guaranteed death benefit provisions;
• Option for guaranteed payments for life.

(Withdrawals may be subject to regular income tax, and if made prior to age 59½ may be subject to a 10% IRS penalty)

In addition, payments as low as $50 can be made each month, with the maximum amounts limited only by the legal ceiling on SEP contributions.

In general, annuities can impact the accumulation of retirement funds. There are many types of annuities to choose from, with features and payout choices to suit a variety of needs. For example, policyholders can choose to receive guaranteed monthly payments for as long as they live. Or, they can elect to receive a lump-sum payment at retirement.

In addition, the death benefit guarantee available with certain annuities can ensure that if the policyowner dies prematurely, his/her beneficiaries will receive the total amount of contributed funds (less any withdrawal and surrender charges on these withdrawals).

With these advantages and added flexibility for both owners and employees, a SEP funded by a New York Life^SM annuity could be the best vehicle to help maximize long-term savings.

Surging Ahead
In recent years, women have made giant leaps in the workplace, creating businesses with remarkably high success rates. Raising those businesses to the next level may only take a few simple steps. With a SEP retirement plan, female business owners can provide incentives that will help retain — and recruit — key employees both now and down the road.

New York Life^SM annuities are issued by New York Life Insurance and Annuity Corporation (A Delaware Corporation).

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