Simplified Employee Pension
(SEP) IRA: SEP IRAs are available to business owners and are a great option for people who are self-employed to save for retirement.
SEP-IRAs: A Simplified Employee Pension
(SEP) IRA allows you to set aside as much as 25 percent of your net earnings from self-employment, up to $54,000 per year in 2017.
These include 401(k) accounts, traditional and Roth IRAs, simplified employee pension
(SEP) plans, savings incentive match plans for employees individual retirement account (SIMPLE IRA), annuities, and insurance policies.
Additional project work will be supplemented by the Learn, Educate, Self-correct, Enforce (LESE) program; the Individual Retirement Arrangements program, which oversees payroll-deduction individual retirement accounts (IRAs), SEPs (simplified employee pension
plans), SARSEPs (salary reduction simplified employee pension
plans) and SIMPLEs (savings incentive match plans for employees); and the Form 5500-EZ Delinquent Filer Penalty Relief program for one-participant plans.
As mentioned, only a minority of owners sponsor a qualified plan, and of those who do, typically the choice is for some type of defined contribution plan, like a Simplified Employee Pension
or 401(k) plan.
economy, many people including advisors are turning to the Simplified Employee Pension
plan as a retirement savings tool in place of traditional individual retirement accounts (IRAs) or 401(k)s.
Large contributions to plans such as 401(k)s and simplified employee pension
(SEP) plans can trim a client's adjusted gross income, year after year.
The Simplified Employee Pension
IRA lets employers or self-employed individuals contribute to an account that's subject to the withdrawal and tax rules of traditional IRAs.
According to the analysisi, which looks at more than 200,000 small business accounts offering a Simplified Employee Pension
Plan (SEP-IRA), Self-Employed 401(k) or Savings Incentive Match Plan for Employees (SIMPLE-IRA), in the past year alone, the average balance in these plans increased 4 percent and average contributions increased 18 percent.
For smaller companies with fewer than 10 employees, a Simplified Employee Pension
plan, or SEP, may be more efficient, suggests Wray.
Under earlier provisions, a simplified employee pension
plan was treated as if it were a separate profit sharing or stock bonus plan for purposes of the overall 25% limit.
With a simplified employee pension
plan (SEP) or a SIMPLE IRA, employer contributions can also be made to individual retirement accounts.