An older colleague just mentioned to me that she had incorporated to take advantage of making contributions for herself into the union pension plan. The people at the local union office actually suggested she do this.
I think that by incorporating, you can pay FICA on less of your "income" because you can decide how much to pay yourself in salary? Is this correct? If so, that would be one plus.
The pension plan the way I see it is a great/ridiculous return on your money for people close to 65, but it is totally different for someone 30 years away. This plan will give you $3.25/month in retirement, that's $39/yr for life (no COLA) for every $100 you put in now. So doing this when you are 55 is a no brainer, you'd be stupid not to do it.
At what age do the returns become only average or worse due to inflation: 20,30,40 years away?
I am already vested with a small amount from employer contrubutions made on my behalf, but can't decide if I should take what is currently extra 1099 income (self employed) and incorporate to follow this plan like my older friend, or if I should just wait and do it when I am closer to payoff age.
I think that by incorporating, you can pay FICA on less of your "income" because you can decide how much to pay yourself in salary? Is this correct? If so, that would be one plus.
The pension plan the way I see it is a great/ridiculous return on your money for people close to 65, but it is totally different for someone 30 years away. This plan will give you $3.25/month in retirement, that's $39/yr for life (no COLA) for every $100 you put in now. So doing this when you are 55 is a no brainer, you'd be stupid not to do it.
At what age do the returns become only average or worse due to inflation: 20,30,40 years away?
I am already vested with a small amount from employer contrubutions made on my behalf, but can't decide if I should take what is currently extra 1099 income (self employed) and incorporate to follow this plan like my older friend, or if I should just wait and do it when I am closer to payoff age.