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OK. This looks like the logical place to start.

I have decided to make a mid life career change and enter the wild and wack world of real estate. Yeah, I know. Millions get their license and millions drop out. However, I'd like to make a go of it.

Here are the questions. I had a 401(k) that was put into a Rollover IRA when I left one job. I also have a SIMPLE IRA from another job which, I understand I shouldn't touch for two years in order to avoid a 25% penalty. What should I do about establishing some type of tax deferred retirement plan as an independent contractor (Keough???[sp?]) and where do I go to read all about it? And can I put $2000 into each individual IRA and/or retirement plan? Can I or should I consolidate them?

Thanks!
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Greetings, Hunkman, and welcome. You wrote:

<<Here are the questions. I had a 401(k) that was put into a Rollover IRA when I left one job. I also have a SIMPLE IRA from another job which, I understand I shouldn't touch for two years in order to avoid a 25% penalty. What should I do about establishing some type of tax deferred retirement plan as an independent contractor (Keough???[sp?]) and where do I go to read all about it? And can I put $2000 into each individual IRA and/or retirement plan? Can I or should I consolidate them?>>

As an independent, self-employed contractor you may establish a SEP-IRA, a SIMPLE or a Keogh plan for yourself. To see which would be more advantageous for your circumstances, read a summary of each in my Foolish Retirement Plan Primer at http://www.fool.com/Retirement/Retirement.htm. You should also get and read IRS Publication 560 (Retirement Plans for Small Business) at http://www.irs.ustreas.gov/prod/forms_pubs/index.html. As to your IRA questions, you will find those covered in the primer previously mentioned and in our IRA area at http://www.fool.com/Money/AllAboutIRAs/AllAboutIRAs.htm.


Regards..Pixy
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What should I do about establishing some type of tax deferred retirement plan as an independent contractor

I suggest going to the library for books on retirement plan options. Here are a couple of online places to look:
http://www.invest-faq.com/
http://www.finpipe.com/
Just search online for keogh and retirement.

And can I put $2000 into each individual IRA and/or retirement plan?

While you may have as many separate IRA accounts as you wish, you may only contribute a total of $2000/year to all your IRAs, regular or Roth. Consolidating them is up to you.

Zev
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Just a couple of additional notes. If you set up a SIMPLE IRA plan for your new business, you will be able to transfer your old SIMPLE money into your new account without having to pay a penalty for moving the money before 2 years.

For my self-employment income, I determined that a SIMPLE IRA was a much better vehicle than a SEP or Keogh, because of the flat $6,000 limit and no % of income maximum I am able to contribute more than in other plans. [I pretty much ignored the Keogh because of its complexity and reporting requirements]

$50,000 is the pivot point between a SIMPLE Plan and a SEP. Assuming you are the only employee:

If you make less than $50,000 in (net) Self-Employment income you will be able to contribute more to a SIMPLE, and

If you make more than $50,000 in (net) Self-Employement income you will be able to contribute more to a SEP.

jbw
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