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Quicker Savings – Contributions SEP IRA

By Guest Author On July 7, 2011 Under Success Secrets

Contributions SEP IRA are greater, making this retirement plan an excellent selection for those wanting toaccelerate their retirement savings. The SEP plan is created to benefit small businesses and the self-employed. For a smaller business , it provides the ability to offer a retirement plan for employees when the business may not have the resources for a moretypical account. The employer makes the contributions SEP IRA  on behalf of the employees, who are qualified to participate if they are at least 21 years old, have worked for the employer for three of the past five years, and have received payment for that work of at least $550. The company is not locked into making contributions every year. The employer can decide each year whether, and how much, to contribute to the employee’s SEP IRA. Sometimes this decision is made after reviewing the company’s profit outlook and taking thecurrent economic conditions into consideration. Many businessespick a mutual fund organization to administer the SEP account, and the employees are allowed to make their individual investment decisions for the plan from the fundsprovided. Contributions must be consistant , so a 20% contribution to one employee’s account requires a 20% contribution to all other qualified employee’s accounts. Once contributed, the money is totally vested. All contributions SEP IRA are tax deductible, and profits on the investments are tax deferred. The business might be qualified for a tax credit of up to $500 per year for each of the first three years for the expense of starting the SEP plan. SEP accounts areeasy to set up with minimal documentation and streamlined administration. The plan works easily for LLCs, S and C corporations, sole proprietorships, and partnerships. When it comes to contributions SEP IRA, understand why bigger is often better forrapid retirement savings. It’s worth looking into the opportunities of the SEP IRA.

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