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Investing/Strategies / Retirement Investing
|Subject: Re: SEP VICE 401K||Date: 3/23/1998 8:51 AM|
|Author: TMFPixy||Number: 2326 of 81560|
Greetings, Gillildraw, and welcome.
<<AS A SELF EMPLOYER WHAT KIND OF SEP ACCT IS ADVISABLE TO INVEST IN?
IS A SEP TAX DEDUCTABLE OR SHOULD I GO WITH A ROTH?
THANKS IN ADVANCE FOR ANY ADVISE, STEVE SENT ME HERE FOR THE BEST ADVISE!!>>
Ouch!!!! How about turning off that Caps Lock key so my eyes don't hurt so much, o.k.? And BTW, if no one has told you before, typing in all caps in cyberspace is considered shouting and somewhat rude. I know that's not the impression you wish to leave.
As to your question, I can't tell you what is "best" for you because that varies from person to person. Only you can decide that. You want to obtain IRS Publication 560, Retirement Plans for Small Business, in which various plans such as SEP, SIMPLE, and Keogh are discussed. These have various features for the self-employed person to defer up to 25% or $30K per year from current net income into a retirement plan. Just like an IRA, the money so deferred is untaxed today and is allowed to grow with all earnings untaxed as well. That is what makes an IRA and these plans "work" -- You don't get taxed today, so the power of compounding can work its magic on the growth in your savings. For a self-employed person, something like the SEP is a "better" vehicle than a traditional IRA because it allows you to put more money aside free of taxes. An IRA is limited to just $2K per year, which is fine but not enough to build a really healthy retirement stash. You can read about IRAs in IRS Pub 590, Individual Retirement Accounts. Both of these publications can be downloaded at:
Get both, read both. They will give you some understanding of the issues involved. Then come back here with any questions you may have. We'll be glad to help wherever we can.
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