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Hi,

We have finally paid off our credit card debt.

Now we are thinking about setting up a retirement plan. We are self-employed.

I have looked over various plans and I am thinking about a SEP, but I am also thinking about setting up a Roth IRA for each of us in addition. I am planning to just keep everything in index funds, probably Vanguard.

Does anyone have experience or opinions to offer?

Laura
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Hi,

We have finally paid off our credit card debt.

Now we are thinking about setting up a retirement plan. We are self-employed.

I have looked over various plans and I am thinking about a SEP, but I am also thinking about setting up a Roth IRA for
each of us in addition. I am planning to just keep everything in index funds, probably Vanguard.

Does anyone have experience or opinions to offer?


Sounds good.

I like the SEP because you can put more in than an IRA.

I like the ROTH because all earnings are tax free.

Max out the ROTH them go to the SEP
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The thing is, having multiple accounts means more paperwork, more headaches, and probably more costs.

You can combine both your personal IRA and your company retirement plan in the same account by using the SEP-IRA. The SEP-IRA makes contributions into your Traditional IRA account. Unfortunately under current tax law you can't do this with a Roth.

Be aware of Vanguard's low balance fees: $10 if your balance in an index fund is below $10,000 and an additional $10 if your balance is below $5,000.
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