Comments on: Self-Employed Retirement Plans: SIMPLE Plan

By: Ryan

Ryan — Tue, 03 Feb 2009 17:47:52 +0000

Ron: I’m not 100% sure how that works. I have a solo 401k and can just pay myself out of my profits. I recommend speaking with a CPA or tax attorney for clear guidance.

By: Ron

Ron — Tue, 03 Feb 2009 17:37:01 +0000

Thanks Ryan.. So I need not be on my own payroll to use SEP IRA?

By: Ryan

Ryan — Tue, 03 Feb 2009 17:25:08 +0000

Ron: Based on my understanding, you should be eligible to open a SEP IRA for your business, even though you also work for an another employer. Here is an article with more information about the SEP IRA: Self-Employed Retirement Plans: SEP IRA Keep in mind there may be some stipulations regarding how much one person can contribute across their personal retirement plans and a self-employed retirement plan. For instance, I have a solo-401k and a 401k from my day job. I can only defer $15,500 of pre-tax income between both accounts (not counting the profit sharing with my solo-401k). I don't believe there is a similar rule with the SEP IRA, but I encourage you to look into it. You may also wish to consult a lawyer or tax attorney for more information (I am not a tax pro and this is only general information).

By: Ron

Ron — Tue, 03 Feb 2009 14:48:51 +0000

I have my own business and no employees. I do not pay myself on a W-2. Can I still set up the SEP-IRA for my small business?

I do work for another firm and am on their W-2. Please suggest.

Thanks,

Ron

By: Doctor S

Doctor S — Fri, 19 Dec 2008 02:16:44 +0000

My company’s program is real good and I just put in only to what they match, 4% from me, 4% match, and an extra 10% just for participating! Do not pass GO! Do not collect $200!

By: Broke MBA

Broke MBA — Thu, 18 Dec 2008 14:37:03 +0000

Thanks for the help! I was not maxing out my 401(k), but was contributing enough to receive the 4% match. I was investing another 7% into a personal Roth IRA. That’s too bad, but not the end of the world I guess. I’ll only be contributing 3% (for the match) in the SIMPLE IRA when the time comes, and I’ll have to up the % into my Roth.

By: Jeff Rose

Jeff Rose — Thu, 18 Dec 2008 04:16:09 +0000

@Ryan

Nice Post. I have one similar in the works and will be sure to reference your post.

By: Jeff Rose

Jeff Rose — Thu, 18 Dec 2008 04:14:59 +0000

@Broke MBA

Simple IRA’s and Simple 401k’s are similar, with a few key differences. I will not bore with the differences (most people have a Simple IRA with their employer).

The big difference with the Simple vs. the 401k are the contribution limits as are noted above in the post. You will not be able to invest as much in the Simple Plan and the match will be maxed out at 3% of your salary. I guess not a big deal if you weren’t maxing out your 401k to begin with.