Who Qualifies For A SEP IRA Account
There are a number of different IRA retirement vehicles to consider such as the simple IRA, SEP IRA, and traditional plans. This is what you should know when it comes to who qualifies for the SEP IRA account.
It is a retirement plan for people that work for themselves. It was created by the government as an incentive for people to create jobs. Freelancers, small business owners, and self employed people all fit this requirement. Just because you work for yourself does not mean that you do not have the ability to save for your future.
Although your retirement may seem to be far off it can sneak up on you if you are not prepared for it. This is why you should try and place as much money into your account each year. There are limits placed on how much you can actually contribute. There is currently no mandate that allows you to make up for previous years so take advantage of the maximum amounts that are allowed. Congress is the only governing body that can increase these set limits.
To qualify for this self employed account you must work for yourself in some capacity. Even if you have a job working for someone else if you still earn money on your own through a business or as a freelancer you are able to set this account up and place funds within the account.
Most retirement accounts make people wait until they are at least 65, or 67 years of age. If you want to have the benefit of no longer working and getting a regular withdrawal without a penalty then a self employed retirement account is for you. The minimum age is 59 1/2. This is many years prior to some of the other retirement investment vehicles. It allows you to slow down, and enjoy the fruits of your labor at an earlier age.
Who says that a self employed account is the only one that you are qualified for? You can set up any of the other accounts that people do who work for someone else. You can have a 401k, a traditional or Roth IRA, and even a social security account. This only increases your ability to have a more rewarding retirement.
There are limits on how much you can place into your account. This limit is determined by congress but ultimately depends on how much you earn each year. What amount you earn is multiplied by the percentage congress has stipulated to calculate your maximum contribution amount. However, other accounts can be used once you have fulfilled the amount into your SEP.
A SEP IRA account is possible for those that own their own business with no employees, self employed persons, and freelancers. Should you also work in a capacity as an employee for someone else you can still qualify. You will need to be able to prove with documentation what you earn and how it was made. You are not limited by just a self employed account should you reach maximum contribution limits.
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You can find a number of retirement options, such as the SEP IRA account reviewed at the site. Similar retirement products like the SIMPLE IRA, 401k, and Keough's are covered extensively.