“The trouble with retirement is that you never get a day off.”
This quote by Abe Lemons says it all about retirement. Retirement is indeed a job that one can never quit, so it might make sense to live it off in the best way possible. For most of the corporate/government/private sector employees, their respective employer takes care of their retirement and they have multiple plans to choose from. But, how should self-employed individuals save considerably for their retirements? Being self-employed offers freedom and if you are planning to enjoy that freedom during retirement, it makes sense to choose a pension plan for your golden years of rest.
SEP IRA: Best Ways to Have a Sustainable Pension Plan
It is quite common among self-employed individuals to ignore their retirement savings until they reach 40 or even older. The key to a comfortable retirement is to consider your retirement investments as a business cost and carry them along with other retirement options.
SEP IRA for Self-Employed
SEP IRA (Simplified Employee Pension) IRA is one of the best retirement options available in the market. Self-employed individuals can create SEP IRA fund for themselves as well as their employees (if any) with easy maintenance steps.
- SEP IRA is easy to implement. This is the primary benefit of SEP IRA and allows you to open and maintain an account without excessive paperwork. You don’t have to file tax annually for your savings and contributions.
- SEP IRA has a maximum contribution of $260,000. SEP IRA allows you to put away up to 25% of your business income along with a retirement contribution of $52,000 making it $260,000 cumulatively.
- SEP IRA offers easy tax savings. If you are planning to save more tax money, open a SEP IRA right before tax payments and contribute before April 15, 2015. If you need an extension, you can request the same and put in contribution up to October 15,2015. Which other tool would offer such freedom in your contributions?
- SEP IRA has no minimum contribution limit. One of the best parts of SEP IRA is that you do not have a minimum contribution limit and if you had a tough financial year, you can plan not to invest anything. It means no compulsory contributions or financial pressure for the same.
In short, you get an incredibly huge contribution limit, tax savings, choice to back off yearly contribution, and maintain your pension plan with minimal paper work. What more could you expect? Start investing this year and build a golden egg for your retirement.