For every self-employed person or sole-proprietor out there, SEP IRA is one of the most worthy investment plans. Though you might not know much about this type of retirement account let me help you with its definition.
SEP-IRA in Simple Words:
The full-form of SEP IRA is a Simplified Employee Pension IRA whose key advantage is the annually high maximum contribution limit. Yes, with SEP IRA, one can contribute up to $53,000 a year.
This IRA plan was created in the late 1970s so that small businesses can get a tax-advantaged retirement plan.
How to Contribute to SEP IRA
One thing to know about SEP IRA is that the contributions are made by the business in the investment account to benefit an individual; the sole employee.
Just like Traditional IRA and 401(k) investments, the contribution you make to SEP-IRA will not be taxed in the year of opening your account. In other words, the SEP-IRA is a tax-deferred retirement investment plan where your money compounds tax-deferred until you withdraw it.
Advantages of Investing in SEP IRA
As we mentioned above, one of the most significant advantages of the SEP-IRA is an extended annual maximum contribution limit than other IRAs.
A high contribution limit offers you more flexibility and relaxation, thereby, you can save more for your retirement in a given year.
In fact, in case you want to contribute a lesser amount or not contribute at all, you’re free to do so. With SEP IRA, you don’t have to contribute every year, and this is another advantage of investing in such a retirement plan.
Now, let’s talk about the downsides of SEP IRA:
According to me, the only downside you could face by investing in SEP IRA is some extra paperwork as compared to a traditional IRA or other types of IRA.
In fact, opening a SEP IRA is just a bit more complex than opening a traditional IRA. However, if you have a trusted IRA custodian by your side, this problem gets solved. It is because IRA custodians like Quest Trust Company offer full support and allow you to open a SEP IRA in simple steps.
Why Choose a Professional Company?
While planning your retirement or opening an IRA choosing a trusted name is always a better idea.
First thing first, the professional companies have years of experience and expertise in their work. Another key benefit is ease of opening an IRA account for your retirement.
With IRA custodians like Quest Trust Company, all you need to do is fill out a simple form on their website, submit the copy to the investment firm, attach or provide the documents, complete the paperwork required, and you will be done.
With such professional and reliable companies, you can maintain both a SEP and other qualified retirement plans -all at once. Or switch between the two whenever you feel like it.
For further information about opening a SEP IRA, please visit their official website questtrustcompany.com, or contact their support team via call or Email.