SEP IRA, of course! Learn what the SEP IRA rules, contribution limits, how to take advantage of this situation from TD Ameritrade.
As a small business owner or sole proprietor, you may be the one who manages it all—sales, marketing, customer service, billing, and quality control. While being the chief cook and bottle washer has its benefits, it also means lots of competing demands on your time. Planning for retirement can get lost in the shuffle.
It’s important to carve out time to plan for tomorrow. A Simplified Employee Pension plan, also known as a SEP IRA, is one way self-employed individuals, like yourself, can start building a financial future.
"Many people don’t realize the benefits of a SEP IRA. Often small business owners and sole proprietors don’t have easy access to 401(k) plans, or don’t want to deal with the administrative burden of a 401(k)," says Matthew Sadowsky, director of retirement and annuities at TD Ameritrade.
The SEP IRA contribution limits are generally higher than those for traditional IRAs and large company sponsored 401(k) plans. And getting started requires minimal paperwork. Plus, the contributions are tax deductible. By investing in your future, you may also reduce the income taxes you’re paying today.
Are you a sole proprietor, independent contractor, or freelancer?
Are you a small business owner?
The SEP IRA contribution deadline is somewhat flexible. A new account must be opened before the tax return due date, which for sole proprietors is generally April 15 (April 17 this year). If you file an extension with the IRS, you may be able to open a new SEP IRA account as late as October 15. For small businesses, the deadline depends on your fiscal year. For example, if your fiscal year end is December 31, the tax filing deadline would be March 15, and a six-month extension could run through September 15.
Taking the first step toward your future retirement isn’t as hard as you may think. Online tools such as this TD Ameritrade retirement calculator can help you determine where you are on your retirement journey, and specialists are available to help you understand the different types of retirement plans.
Although living in the present is important, consider carving out some time now to plan for your future financial well-being. Then get back to work. Those dishes aren’t going to wash themselves.
for thinkMoney ®
Financial Communications Society 2016
for Ticker Tape
Content Marketing Awards 2016
Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.
Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.
TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.
Market volatility, volume, and system availability may delay account access and trade executions.
Past performance of a security or strategy does not guarantee future results or success.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Options trading subject to TD Ameritrade review and approval. Please read Characteristics and Risks of Standardized Options before investing in options.
Supporting documentation for any claims, comparisons, statistics, or other technical data will be supplied upon request.
This is not an offer or solicitation in any jurisdiction where we are not authorized to do business or where such offer or solicitation would be contrary to the local laws and regulations of that jurisdiction, including, but not limited to persons residing in Australia, Canada, Hong Kong, Japan, Saudi Arabia, Singapore, UK, and the countries of the European Union.
TD Ameritrade, Inc., member FINRA/SIPC, a subsidiary of The Charles Schwab Corporation. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2022 Charles Schwab & Co. Inc. All rights reserved.