Take Up A SEP Retirement PlanIf you are thinking about securing your post retirement life then why not take up a SEP retirement plan? It is an easy and low cost way to set aside money in retirement accounts for future use. Under SEP, an employer contributes to the traditional Individual Retirement Accounts of all its employees. The employer can contribute a maximum of 25 percent of an employee's pay to his SEP IRA. An employee who is at least 21 years of age and who has served the employer for at least 3 out of the last 5 years is eligible to avail the benefits of SEP accounts. Even part time employees can be included in SEP depending upon their total annual income. SEP retirement plans offer various advantages to the employer as well as the employees. Since the contributions made by the employer are tax deductible, you end up getting tax benefits. Moreover, you are not forced to make a fixed contribution every year. You can contribute any amount you like, year on year. Also, the administrative costs pertaining to setting up and maintaining SEP are very low. Setting up a SEP retirement plan in action is also not a tough task. You just have to zero down on a financial institution who will serve as the trustee and do the rest of the job. A manager would do all the paper work and get the SEP retirement plan rolling. As far as the maintenance is concerned, you just have to keep making the contributions and the trustee would make sure that all the required filings to the IRS are done in time. SEP retirement plans do not give you the liberty to take loans from SEP accounts but you can definitely make withdrawals at any time you like. But, you must remember that the withdrawn amount is taxable in the year in which it is distributed. Therefore, SEP is a very simple and safe way to make future investments post retirement. So, a quick review would just suggest you to select a trustee, sign the agreement, inform the employees about the plan, deposit contributions before the due date of filing your income tax return and monitor your trustee. Monitoring would help you decide the number of funds that you would like to invest your money in. So, if you want a simple, hassle free and beneficial retirement plan then nothing could beat a SEP retirement plan. So, just don't keep thinking about it and get it for yourself and your employees. |