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The self-employed have several plan options, including defined contribution plans such as a solo 401(k), SEP IRA and SIMPLE IRA. But they also have some defined benefit options, too.
A SEP IRA, or Simplified Employee Pension Individual Retirement Account, has many features similar to an IRA, but comes with a few extra perks that make it especially desirable for those without ...
Other Ascensus retirement services include individual 401(k), business 401(k), MEP 401(k), PEP 401(k), defined benefit plans, SEP IRA, profit-sharing, and non-qualified deferred compensation programs.
Another con for a SEP-IRA is not allowing catch-up contributions for those over 50. Nor does it offer an after-tax Roth option or account loans, which are usually features of the solo 401(k) .
A Solo 401(k) Plan includes a $6000 catch-up contribution for plan participants over the age of 50, which is not the case for a SEP IRA. A Solo 401(k) Plan can offer the owner Roth contributions, even in the case where the owner is otherwise not eligible to contribute to a Roth IRA due to the Roth's annual income limitation.
The best plan for a business owner is not the best plan for an employee, so deciding if a 401(k) or another retirement account type is best requires research or the advice of a professional.
Usually best for: People who do not have access to another retirement plan through their employer. To consider : These have the same rules as a Traditional IRA, such as a 10% penalty for ...
While saving for retirement is crucial, knowing what that looks like can be difficult. Self-employed individuals must choose between accounts like a SEP IRA or a solo 401(k). Both accounts have...
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