Rules for Simplified Employee Pension Plans better known as a SEP Plans
A SEP is a special type of IRA. Under a SEP plan the employer creates an IRA account for each eligible employee, hence the name SEP-IRA. A SEP is funded solely with employer contributions. Employees do not make contributions to their SEP-IRA retirement account. Any money that goes into a SEP automatically belongs to the employee. Thus, the employee has the right to take his SEP IRA account money with him whenever he stops working for the company.
Any size business can establish a SEP, but the SEP retirement plan is utilized mostly by the self-employed and the small business with few employees. The SEP IRA rules dictate that if the business contributes for one employee, (i.e., the owner), then the business must contribute proportionately for all of the employees. With few exceptions, anyone who works for the business must be included in the SEP. However, you can exclude from participating in the SEP plan anyone who:
1. Has not worked for the company during three out of the last five years.
2. Has not reached age 21 during the year for which contributions are made.
3. Received less than $450 in compensation (subject to cost-of-living adjustments) during the year.
SEP IRA contributions to each employee for 2004 cannot exceed the lesser of $41,000 or 25% of pay for W2 recipients (20% of income for sole proprietors). The SEP IRA contribution limit goes up to $42,000 for 2005, and is subject to cost-of-living adjustments for later years. SEP-IRA rules do not provide for additional catch-up contributions for those 50 years old or over.
A growing number of self-employed individuals with no employees are abandoning the SEP-IRA for a newer type of retirement plan called the Solo 401(k) or Self-Employed 401(k). The two main reasons for the switch are 1) they can generally contribute much more to a Solo 401(k) than they can under a SEP IRA, and 2) Loans are allowed under a Solo 401(k), whereas loans are prohibited under a SEP-IRA.
Example: Henry, age 52, a realtor received $60,000 in compensation from self-employment income in 2004. For 2004, he could contribute a maximum of $27,152 in a Solo 401(k) versus a maximum of $11,152 under a SEP IRA.
However, the Solo 401(k) does not work for businesses with employees. Thus, if your company plans to hire employees or has a handful of employees, the SEP IRA may be your best choice as a retirement plan that is inexpensive and simple to operate.
About The Author
Daniel Lamaute, CEO of Lamaute Capital, Inc. (www.InvestSafe.com) specializes in setting up retirement plans. You may visit http://www.investsafe.com to access a free calculator that will help you estimate what your maximum contribution might be under different plans.
Should You Consider Investing in Enhabit (EHAB)? Yahoo Finance
Opinion | The Best 50-Year-Old Investing Advice Money Can Buy The New York Times
Short-Term Investments Can Increase Reward and Decrease Risk Kiplinger's Personal Finance
1 Great Reason to Invest in the Stock Market Right Now The Motley Fool
Investing in Bonds vs Stocks: Ideas for 2023 Morgan Stanley
Investing for the next decade Franklin Templeton
2 Solid Dividend-Growth Stocks Investing.com
Boring is Beautiful in Investing A Wealth of Common Sense
DeFi sparks new investments despite turbulent market: Finance Redefined By Cointelegraph - Investing.com
DeFi sparks new investments despite turbulent market: Finance Redefined By Cointelegraph Investing.com
Action Plan: What Part Of November Don't You Understand? Investor's Business Daily
Critical Investing Mistakes Investors Should Avoid Right Now The Motley Fool
Real estate investing takes on a new focus for the under-40 crowd Therogersvillereview
SPY: What is “Active Investing”? StockNews.com
Top ranked advisors say these are the 3 biggest investing mistakes people make during recessions - CNBC
Top ranked advisors say these are the 3 biggest investing mistakes people make during recessions CNBC
Motley Fool Investors Look Back at 2022 and Forward to 2023 The Motley Fool
Opinion: Ron Baron explains his investing philosophy with goal of doubling his money every 5 to 6 years - CNBC
Opinion: Ron Baron explains his investing philosophy with goal of doubling his money every 5 to 6 years CNBC
Foresight Autonomous earnings missed by $0.05, revenue topped estimates By Investing.com - Investing.com
Foresight Autonomous earnings missed by $0.05, revenue topped estimates By Investing.com Investing.com
10 Common Investing Mistakes That Can Easily Be Avoided Kiplinger's Personal Finance
One of the World's Richest Investors Just Sounded a Big-Time Warning for Wall Street - The Motley Fool
One of the World's Richest Investors Just Sounded a Big-Time Warning for Wall Street The Motley Fool
How To Invest Like Warren Buffett: 3 Simple Rules - Apple (NASDAQ:AAPL), Coca-Cola (NYSE:KO) - Benzinga
How To Invest Like Warren Buffett: 3 Simple Rules - Apple (NASDAQ:AAPL), Coca-Cola (NYSE:KO) Benzinga
2 Stocks to Be Grateful for This Thanksgiving Investing.com
JEPQ ETF: Low Volatility Approach To Growth Investing Seeking Alpha
8 Biggest Risks of Fixed-Income Investing GOBankingRates
1 No-Brainer Stock to Buy Right Now for Less Than $100 The Motley Fool
Vatican Tells Catholics How to Make 'Faith-Consistent' Investments The Wall Street Journal
The Worst Mistake Moderna Investors Can Make in 2023 The Motley Fool
2 Investments to Buy No Matter What Happens in 2023 The Motley Fool
3 Investing Megatrends You Can't Afford to Miss The Motley Fool
China Is Investing Billions in Pakistan. Its Workers There Are Under Attack. - The Wall Street Journal
China Is Investing Billions in Pakistan. Its Workers There Are Under Attack. The Wall Street Journal
Investing in Rewind Andreessen Horowitz
The fear of missing out can be a killer for investors. Here's how top-ranked financial advisors keep it at bay - CNBC
The fear of missing out can be a killer for investors. Here's how top-ranked financial advisors keep it at bay CNBC
Tesla, Manchester United rise premarket; Activision Blizzard, Apple fall By Investing.com - Investing.com
Tesla, Manchester United rise premarket; Activision Blizzard, Apple fall By Investing.com Investing.com
Devon Horace on Nike, the Trail Blazers and investing - Portland Business Journal - The Business Journals
Devon Horace on Nike, the Trail Blazers and investing - Portland Business Journal The Business Journals
Investing in Equals Andreessen Horowitz
Where to Invest $10,000 in a Bear Market The Motley Fool
Occidental Petroleum investing heavily in low carbon future Midland Reporter-Telegram
Crypto's collapse leaves investors with less to be grateful for this holiday season - The Spokesman Review
Crypto's collapse leaves investors with less to be grateful for this holiday season The Spokesman Review
This Week's Best Value Investing News, Podcasts, Interviews (11/25/2022) The Acquirer's Multiple
Grom Social Enterprises earnings matched , revenue fell short of estimates By Investing.com - Investing.com
Grom Social Enterprises earnings matched , revenue fell short of estimates By Investing.com Investing.com
The Big Secret Wall Street Will Never Tell You About Investing The Motley Fool
Investing Platform Public Announces Global Launch Yahoo Finance
5 Falling Stocks Investors Didn't Expect on Black Friday The Motley Fool
Will Jumia Stock Pay Off Big for Investors? The Motley Fool
Investors pump almost $16bn in to US corporate bond funds Financial Times
Investors in Argosy Property (NZSE:ARG) have unfortunately lost 14% over the last year - Yahoo Finance
Investors in Argosy Property (NZSE:ARG) have unfortunately lost 14% over the last year Yahoo Finance
This seasonal investing strategy is 100% accurate in the past 35 years — here are this year's stocks to consider buying - MarketWatch
This seasonal investing strategy is 100% accurate in the past 35 years — here are this year's stocks to consider buying MarketWatch
Dollar Weakness Results in a 3-Month High in GBP/USD Investing.com
Nike Is Going All In on Web3. Here's How Investors Can Benefit The Motley Fool
Investors Who Put $2 Billion Into FTX Face Scrutiny, Too The New York Times
Investing Psychology Today Requires All Traders to Awaken Their Speculator Minds
Stock trading strategies are as rampant today, as they were during the Great Bull Market. Yet, can you truly master the stock market like so many investing books propose?Consider this: When you can't even trust the financial reports of analysts, and the company bean counters that feed them with data, how can you? What's needed are robust, stock trading strategies; the type that enables you to think above the crowd, but not apart from them! The kind of strategies in touch with your speculator mind response!Witness the Enron fiasco.
"Financial planners are like dentists: they may occasionally inflict pain, but in the end, you will be better off for following their advice!"Whoever wrote these lines must have either been a financial planner or someone who relied heavily on planners for finance management. We all know that planning our finances is vital.
Day Trading the SP Futures with Initial S/R and the NYSE TICK
For instance, if the market moves up in the first 20 minutes of trading, touches the initial resistance zone, and then turns down, this implies that a good tradable downtrend move is likely to develop.How strong that new trend becomes is market-dependent.
Wit and Wisdom on Money, Wall Street and Success - Part #4
Can you concisely summarize your investment philosophy in a few sentences? My experience is that most people can't. The quotes that follow are diamonds that offer a real powerful education in the world of Risk Management.
Reasons For Joining An Investment Club
Whether you're a novice investor or an experienced stock picker an investment club may be beneficial to growing your investment portfolio. This article explains what an investment club is, why you should have an investment program and finally why you should join an investment club.
How to Calculate the Value of Your U.S. Savings Bonds
If you're like many Americans over the age of 55, you've probably had money taken out of your paychecks for years and years in order to purchase U. S.
It Is Never Too Early To Start A Roth IRA!
The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits, one dealing with your compensation and the other dealing with your contribution.
Discover the Foundation of Retiring Wealthy - The IRA!
Let me tell you about some legal ways to avoid getting taxed on profits from the stock market. You can make a lot of money now with the stock market as low as it is at this time as I teach you in my home study course.
Get Wealthy With the Rule of 72
When it comes time to retire how many people would like tohave a nest egg that is 2 or 3 or even 4 times larger thanwhat they have? With an answer so obvious allow me toexplain how you can make it happen for yourself.First we'll explain the Rule of 72.
Should You Put Your Annuity in an IRA?
Let me start by answering that question..
Building The Foundation For Wealth
You wouldn't build your home on anything less than a solid foundation. Similarly, you can't build wealth and financial independence without first having sound foundational principles to build upon.
Introduction To FOREX
The Foreign Exchange Market, better known as FOREX, is a worldwide market for buying and selling currencies. It handles a huge volume of transactions 24 hours a day, 5 days a week.
Better Investing Made Easy
If there were one piece of advice that an investor could ask for, the question would probably be something like "What do I need to do to invest better?" Better investing choices are sought by investors every day. Some find them and succeed, others do not.
Asset Allocation Lessons: The 70% Inflation Solution
For investors only..
Holy Grail Investments
Every year I go to the Money Show inOrlando, Florida. Thousands attend.
Gold and Silver Maple Leafs Get New Packaging
Gold Maple Leafs and Silver Maple Leafs are receiving packaging makeovers, changes clearly mandated by investor disfavor with packaging that the Royal Canadian Mint has used since the coins were introduced. Gold Maple Leafs debuted in 1979, Silver Maple Leafs in 1988.
Press Release Scams and Successes: Reading Between the Lines
Press releases are a means through which companies can keep the public up to date regarding their recent affairs. It is the duty of every public company to keep its investors and indirectly potential investors aware of what is going on in the company.
Options Education: Financing the Calendar!
As a trader, one of the key things that I try to consciously do is to cultivate my instincts by talking with other traders and investors as often as possible. It still amazes me how large the divergence of opinion that exists regarding what people believe will unfold as we enter the new millennium.
Buying Florida Investment Properties and Where Its Hot
Relaxing in Style: Florida Investment PropertiesIn Florida, relaxing in the sun and sand is a way of life. There's no better way to experience a slice of Florida living than buying your own space.
Investing in Car Dealerships: Doing Your Homework
This article attempts to help give the investor a broader basis upon which to decide whether a dealership merits their time, money and attention.Interviewing Factories and Financial InstitutionsLenders have an affirmative duty not to promiscuously disclose the financial condition of their debtors.
|home | site map|