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Author: tomolly Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75532  
Subject: SEP-IRA Date: 2/21/2000 9:24 PM
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Thanks for the help

Are SEP- IRAs only for those who are incorporated? I am a sole proprietor who plans on incorporating in FY 21. If I can establish an SEP-IRA can I roll 20K from a 403b into it? Thanks
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Author: zorloc Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19384 of 75532
Subject: Re: SEP-IRA Date: 2/22/2000 12:06 AM
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Are SEP- IRAs only for those who are incorporated? I am a sole proprietor who plans on incorporating in FY 21. If I can establish an SEP-IRA can I roll 20K from a 403b into it? Thanks

No.

You have the option of setting up a SEP, SIMPLE, or Keogh (Qualified Plan). Here are the advantages/disadvantages of each:

SIMPLE: Best if your NET income is low. You can contribute $6000 as an employee (as long as you make at least that much) and then a match as an employer up to 3% of your income (with your income capped at $160,000) to give you a maximum contribution of $10,800. But if you make that much another plan is better.

KEOGH: A Keogh will allow you to contribute more money than a SIMPLE if you NET more than $27,273. Under a Keogh you can contribute through 2 parts: A money purchase plan, and a profit sharing plan. With both parts you can contribute as an employer up to 25% of your income to a maximum of $30,000. Keoghs are a bit harder to setup, require more organization, and frequently involve higher fees than the other types of plans.

SEP: SEPs are the easiest to manage and require the least amount of thought. You can put more money away with a SEP vs. a SIMPLE if you Net more than $50,000, but a Keogh will always allow you to contribute more. A SEP allows you to put away 15% of you first $160,000 in NET income, and thus to a maximum of $24,000 (I know the documents say $30,000, but that is only if you have multiple sources.)

jbw

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Author: TheImpaler Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 19459 of 75532
Subject: Re: SEP-IRA Date: 2/24/2000 3:37 PM
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zorloc wrote:
"KEOGH: A Keogh will allow you to contribute more money than a SIMPLE if you NET more than $27,273. Under a Keogh you can contribute through 2 parts: A money purchase plan, and a profit sharing plan. With both parts you can contribute as an employer up to 25% of your income to a maximum of $30,000. Keoghs are a bit harder to setup, require more organization, and frequently involve higher fees than the other types of plans."

hi zorloc,

i found your post to be very helpful. i have an additional question reguarding KEOGHs, more specifically the the Profit Sharing plan. i have recently incorporated as an 's-corp',with just myself as an employee, and need to know whether the maximum contribution that is allowed is relative to what i pay myself or what the company takes in for the year.

thanks in advance,
vlad


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