Which SEP IRA is Best For Your Retirement?

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SEP (Simplified Employee Pension) IRA accounts are a great way for small business owners and self employed individuals to invest a portion of their company profits for their retirement. You may qualify for a SEP IRA if you own a C corporation, S corporation, sole properitorship, LLC, or joint venture partnership.

SEP IRA Benefits

  • Easy to Setup and Contribute to
  • Low administrative fee in comparison to actively managed retirement funds
  • Flexible contribution limits
  • 100% tax deductible and your earnings grow tax deferred

SEP IRA Requirements

In 2009 a SEP IRA has a contribution limit of $46,000 ($45,000 in 2007). Contributions to a SEP IRA are generally 100% tax deductible and investment earnings in a SEP IRA grow taxed deferred. Withdrawals after age 59 1/2 are taxed as ordinary income. Withdrawals prior to age 59 1/2 may incur a 10% IRS penalty as well as income taxes.

A SEP IRA has broad appeal due to its high annual contribution limits, completely discretionary and flexible annual contributions and minimal administration. SEP IRA plans can be established by a one person business or by a business owner with employees. (Source: sepira.com)

Top SEP IRA Providers

Bank Name Details Minimum Account Balance
TradeKing SEP IRA $0 fees $0
Zecco SEP IRA $0 fees $0
OptionsXpress SEP IRA $0 fees $0
Etrade SEP IRA $0 $0
Fidelity SEP IRA no setup fees, no maintenance fees $2500
Bank of America SEP IRA $30 fee for balances < $10000 $0
Sharebuilder SEP IRA $25 if not premier member $0
Vanguard SEP IRA $10 custodial fee on funds < $5000 $3000

Start Investing Your Business Profits for the Long Haul

The sooner you open a SEP IRA for your small business, the longer compound interest will increase your overall gains. The key is to take action as soon as possible to not waste another second.

What’s holding you back from opening a SEP IRA? What other questions do you have?