As a financially literate business student, you know about the magic of compound interest. Conventional wisdom and Suze Orman tell us that college grads will have a tidy sum as senior citizens if they start socking away for retirement even a small sum each month and letting it grow in stock mutual funds for decades. Unlike you, few of your peers worry about retirement savings; they are busy looking for a good job fresh out of college. Now, imagine you are working for a small but growing construction company. Your boss insists the company can’t afford to offer an IRA or 401(k) plan to you and the other ten employees. You do some digging and find that providing a SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account) would generate tax savings for your boss’s small company, not to mention give you a head start on investing in mutual funds.

Your Task. 

Search for articles that explain SIMPLE IRA rules. Check out the Department of Treasury, Internal Revenue Service website. Once you are well informed about the plan, think through your persuasive strategy. What arguments are most likely to sway your boss? Write a memo proposal to your boss (use your current supervisor’s or your instructor’s name) arguing for the benefits of introducing a SIMPLE IRA. Apply what you have learned about unsolicited informal proposals in this chapter.