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TAX-DEFERRED SAVINGS VEHICLES

 

Are You Ready to Retire?

Retirement Budgeting

Sources of Retirement Income

Tax-Deferred Savings Vehicles

Estate Planning

Selling Your Business

Getting Your Business Ready for Sale

Working With a Business Broker

Closing-Your-Business Sale

More Resources: Retirement Planning
  Simplified Employee Pension (SEP)-IRA

This plan is basically a cross between a traditional IRA and a Keogh plan. A SEP-IRA is structured like a cross between a traditional IRA and a Keogh. It:
  • Permits you to make annual pre-tax contributions of up to 15 percent of net earnings, up to a maximum of $30,000 in 2002.
  • Allows each worker to set up individual IRAs at any financial institution.

Business Applications

TIP: Can be used by self-employed individuals, partnerships, or the owners of unincorporated businesses, limited liability companies, or Sub-S corporations.

TIP: A subchapter S corporation is a common structure for sole proprietorships and partnerships. The advantage is that the corporation doesn't pay taxes. Business earnings flow directly to the owner and are taxed at the individual rate rather than the higher corporate rate.
  • Enables businesses to deduct contributions they make to workers’ accounts as business expenses.
  • Makes administration easier than many pension plans because there’s no annual federal reporting requirement.
  • Does not require annual company contributions, but permits them.

TIP: You must contribute the same percentage of company money to your workers’ accounts as the company contributes on behalf of the company to your own personal retirement account.

Savings Incentive Match Plan for Employees (SIMPLE) IRA >