When it comes to investing in your future it helps if you’re able to invest in what you understand and know. Have you considered how a SEP IRA could benefit you? Simplified Employee Pension plans are a low-cost and easy option for those who are an owner or partner of a corporation, or they are self-employed. This type of account allows you to invest in what you know is to be the best. However, there are a few simplified employee pension IRA rules that must be followed.
Understand the Rules
When it comes to contributing to retirement plans, you can select the precise percentage of a contribution for a given year for you and your staff, which could be anywhere from 0 to 25% of an earned income. However, there is a requirement that the contribution percentage you choose for a year must also match the same for every employee. A self-directed simplified employee pension IRA is also good for people that currently have a retirement plan that doesn’t allow any self-direction. Just transfer part or all of the funds from your current retirement plan to a self-directed simplified employee pension IRA so you can start choosing your very own investments. It is important to keep in mind that as of 2018, the maximum compensation for use in calculating a contribution is $265,000.
Step Outside of a Conventional Employer Plan for Retirement
A simplified employee pension IRA that self-directed doesn’t require the same operating and startup costs of conventional employer plans. It also allows for contributions that are tax-deductible of 25% of an employee’s pay clear up to $54,000. It gives you as well as your employees the flexibility to direct retirement funds into mortgages, real estate and alternative investments.
