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SEPs - Simplified Employee Pensions as a Retirement Funding Option
Simplified Employee Pensions for Small Business Owners
If life goes as many of us hope it will, then retirement is in our future. Its hard to even think about for many people that are younger because it just seems so far off in the distance. Well, as for me, I don't doubt its speedy approach ever since I have had children. Everyone said it would go quickly, but I had no idea how quickly the time would fly. So I anticipate that the speed with which those retirement years may be approaching will be fast or just as fast.
Simplified Employee Pensions deserve at least a little bit of consideration for those thinking ahead to retirement and are a small business owner. This is a great way to have some money for the retirement years. It is rather simple, as a choice, especially compared to all there is out there. Yet it offers amazing benefits and advantages. You could look at SEPs as a combination of an IRA and a Keogh. Like a Keogh, you can contribute based on your income. Its rather generous as well, for in recent years you could contribute up to twenty five percent. You can also set these up for your employees as well.
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SEAs have similarities with Keoghs and IRAs
Simplified employee pensions are like IRAs in that how you set one up is completely up to you. You can be as aggressive or as conservative as you like. It just depends on your personal preferences and goals. So if you do have employees, they have the freedom to make their own choices as well, and any burden in that regard is off of you, the employer.
SEPs are better than Keoghs and IRAs though in some regards. They are easy to set up and maintain, for one. Another great thing is that all contributions under simplified employee pensions under the maximum as defined by law, are fully tax deductible. They grow on a tax deferred basis until withdrawals are made. They have a lot of flexibility as well. You have freedom to choose what you want as far as contributions are concerned. So if you are a self employed business owner or in a a small business, and you have never considered simplified employee pensions as a retirement funding option, it may be something to to do in the future.