Here's a good idea long in coming - retirement plans for self-employed agents. Retirement plans offered through a company to self-employed workers are called multi-employer plans. Does your broker have one?

Fred Sands Realtors has just established the first agent retirement plan in California. The plan, developed with Piper Jaffray Retirement Services Group allows Fred Sands agents to benefit from tax-deferred retirement savings and enhance their long-term financial security . Until now, agents had to set up their own IRAs or similar accounts.

The sales agents choose from a number of investment options for their plan assets. They can also participate in a special "Team Building Incentive Program" where the company will contribute funds directly into an agent's retirement account.

As a 401(a) program, agents can make contributions to the Fred Sands plan directly via check, or through automatic contributions from commission checks. Investment growth of assets in the plan are tax deferred.

According to Fred Sands, founder and CEO, the Fred Sands plan makes preparing for retirement easy for agents. "Our retirement plan shows how much we appreciate our agents and their contributions to the company," says Sands.

According to John Eskew, CFO of Windemere Real Estate, the Sands plan is similar to a plan that Windemere first initiated with Piper Jaffray, a plan that has been adopted by some other brokerages around the country.

"Piper is working with various Realtors throughout the country," says Eskew. "Each plan has its own twists as far as how money is put into the plan, or if the brokers contribute at all. What varies from plan to plan is how the companies contribute money on the agent's behalf. Windemere contributes on length of tenure and meeting productivity goals. Other companies can do it that way or through recruiting techniques and total company profits."

On the East coast, Burghorff ERA in New Jersey also offers a retirement plan. They have chosen to offer a variety of nationally known financial planners from which agents can choose.

What if you are associated with a "100 percent commission" firm? According to Bill Echols, spokesperson for RE/MAX, the agents are independent contractors, so typically franchise organizations do not provide a program for them.

If you are an associate of a large franchise or work with a broker who does not offer a retirement plan, it's never too late to start one.

The key to financial planning is to start by saving more of what you earn and make that money grow. As a self-employed agent, you can start with a SEP IRA (Simplified Employee Pension) in which you can put up to 15% of your income pre-tax. You can set up a retirement account with a number of financial planning firms such as A.E.Edwards or American Express Financial Services.

If you are a late starter, financial planners advise that it is better to take a smaller steady return over the long run, instead of trying to hit a big killing on the stock market. Just begin by putting some savings away and invest at a risk level with which you are comfortable.

You can also contact the National Association of REALTORS® for information on their retirement plan for agents at One Realtor Place.

Related Article: Retirement: Take Control of Your Personal Finances

Published: March 23, 1999

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