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Small Business Self Directed Retirement Plan

Home > Small Business Retirement Plans > SEP IRA

SEP IRA:
SEP IRA Rules

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What We're Talking About: Self Directed Retirement Plans

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Self-directed Simplified Employee Plan (SEP)

Simplified Employee Pension plans (SEPs) may provide an easy, low-cost retirement plan option if you are self-employed, a partner or the owner of a corporation. With a self-directed SEP, you can invest in what you know, or what you want to learn about.

When you choose a SEP, you make contributions to a Traditional IRA for yourself and your employees, if applicable. If you choose to contribute to your plan, you have the ability to choose the percentage of contribution for any given year (0 - 25% of earned income) both for yourself and your staff. The only requirement is that the contribution percentage, in any year, be the same for each employee.

SEP IRA Rules

  • The SEP IRA is a retirement plan designed to benefit self employed individuals and small business owners. Sole proprietorships, S and C corporations, partnerships and LLCs qualify.
     
  • The SEP IRA has a maximum contribution limit of $49,000 for 2009.
     
  • Contributions to a SEP IRA are generally 100% tax deductible.
     
  • Contributions to a SEP IRA are made exclusively by the employer. Employees do not contribute.
     
  • Withdrawals from a SEP IRA are permitted after age 59 1/2 without penalty.

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This site is not intended as, and may not be relied upon as, tax, legal, investment or other advice.
Readers desiring such advice should consult their own advisors.

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