I also am a rookie fool wanting to start some retirement savings. I am self employed with no full time employees. Other than the allowed annual deposit amounts, are there any other differences/considerations between these two vehicles?Would the SEP contributions be tax deductable from Schedule C and the IRA from the 1040?What about the Minimum Annual Withdrawl (or whatever it is called) after a certain age? Does it apply to both?Does a broker have to handle the same paperwork for an SEP as an IRA? Would that give more choices for brokers?Thanks fools,Ric
A SEP is a form of IRA. It offers you the opportunity (but not the obligation) to shelter more money in your retirement account than a plain IRA. You have no full time employees. If you have part time employees I'm not sure whether you would need to include them in a SEP. If it is just yourself, there are some additional papers to be signed, but it acts just like any other IRA. You can also, in addition to the proportion of profits you can put into your SEP, put $2000 of traditional IRA money each year into that same account. Your custodian may charge a fee for the SEP even if they don't for a plain IRA. Or it may not. If eligible for a SEP, and if your part time employees don't create a problem, go for it. Best wishes, Chris
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