What is a SEP IRA?
If you’re looking for a very simple and inexpensive retirement plan to administer that will allow large tax deductible contributions, the SEP IRA (or Simplified Employee Pension) is a great option for a self-employed individual or a small business. The rules governing a SEP plan are not as complicated as a 401(k), yet, contributions to a SEP are tax deductible, and earnings within the account are tax free until withdrawal, just like a 401(k).
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Advantages of a SEP
Higher Contribution Limits
An employer may contribute up to 25% of each employee’s annual compensation up to the maximum contribution cap established for that tax year, provided that their salary fits the income guidelines and those contributions are deductible to the employer.
Easy to Establish and Administer
A SEP can be established at your tax filing date and has no annual filing requirements like many other business retirement plans. Corporations, Subchapter-S, partnerships, sole proprietorships and non-profit entities may all establish a SEP, even if there’s only one employee that meets the employee requirements for the plan.
Disadvantages of a SEP
Unlike a Solo(k) or 401(k), participant loans are not permitted from a SEP plan and Roth contributions and conversions are also not allowed.
Distribution Age Requirements and Penalties
The same age bracket for non-penalty distribution applies to SEP plans as most other tax deferred retirement plans: After 59 ½ and before 70 ½. Distributions must begin by April 1st of the year following the year the individual reaches age 70 ½. Also, keep in mind distributions requested before age 59 ½ would incur a stiff tax penalty.
“Provident Trust Group has grown to over 20,000 clients with over $3 billion in assets currently in custody. Both internationally and across the U.S., clients and their teams of financial advisors have placed their confidence in us. ”
Why Open a SEP IRA with Provident?
Provident is owned and operated by a team of tax attorneys and highly qualified professionals. We do not sell proprietary products and are not affiliated with any bank or financial institution. What we have to offer is personalized, timely service that assists our clients in reaching their financial goals.
Complex Transactions Simplified
The Provident approach focuses on delivering clear and concise information to our clients so that they can make well-informed decisions regarding their investments. We handle all the administrative details to assure them that every reporting detail is covered and completed on time.
All it takes is a phone call, to begin your relationship with the professionals at Provident, though we’d be happy to meet you in person at our Las Vegas office as well.
Give us a call at 888-855-9856. We’d be happy to answer your questions related to retirement savings and investments through a Self-Directed SEP IRA or any other retirement plan options that you are considering.