My Company does not set aside a 401k. I've hear a great deal around SEP. Can anyone plain one up? Max Contribution?
Answers:
SEPs are for population who are Self-Employed. You would not be eligible for one.
You should be contributing to a Roth IRA. You put in after-tax dollars, but your yield grow charge free forever.
I would run next to a Roth so that your profits will be rates free.
I believe an SEP have to be through the employer. It is not lone for self-employeed individuals. It stands for simplified hand allowance.
A SEP IRA is an member of staff sponsored retirement plan. It stands for Simplified Employee Pension IRA. Not purely anyone can unambiguous one. It must be open by your employer and workforce must bump into the following conditions to initiate one:
1. Must be at tiniest 21 years of age
2. Have worked for that employer for three out of the closing five years.
3. Must enjoy at smallest $450 within taxable compensation for that year
The max contribution to a SEP IRA is the minor of 25% of th workforce income or $44,000 for 2006. Also, merely close to a traditional IRA, this money lowers your taxable income when you contribute, but it is also taxable when you withdrawl the money at 59 1/2 years of age. If you're looking for something to contribute to, I would look into a Roth IRA. If you're single and brand $99,000 or smaller amount or are married and get $165,000 or smaller amount combined, you are eligible to contribute to a Roth. Since you hold already remunerated taxes on the monies going into a Roth, you don't hold to earnings taxes when you run it out at retirement. Good luck.
Can't do a SEP...that's for Self-Employed. But you can unfold up an IRA. EIther ROTH or regular. Sure the ROTH is due free returns but you lose out on the estimate...so it's just a gain if you are in a superior toll bracket when you verbs the money out later when you put it surrounded by.so it's solitary a honest entity if you're young at heart and at the germ of your trade or own lots of deduction already.
Not a big business deal to unscrew an IRA as probably 60% of the country fail to contribute the IRA maximum anyways. see www.irs.gov for contributions as the max is dependent upon a few factor that you didn't discuss such as income, married status, and whether your spouse have a 401k.