SEP IRA

A SEP IRA is a written plan that allows an employer to make contributions toward their own retirement and their employees’ retirement without getting involved in a more complex qualified plan.

A SEP IRA is a written plan that allows an employer to make contributions toward their own retirement and their employees’ retirement without getting involved in a more complex qualified plan.

Overview

A SEP IRA is a written plan that allows an employer to make contributions toward their own retirement and their employees’ retirement without getting involved in a more complex qualified plan. Under a SEP, the employer makes contributions to a traditional individual retirement arrangement (called a SEP IRA) set up by or for each eligible employee. A SEP IRA is owned and controlled by the employee, and the employer makes contributions to the financial institution where the SEP IRA is maintained. The employee may also make annual contributions subject to the limits for traditional IRAs.

Details

LimitUp to 25% of compensation
or $57,000 in 2020 ($58,000 in 2021), whichever is less
EligibilityMust be sole proprietor, a business owner, in a partnership, or earn self-employment income by providing a service

Contribution rules
Must be made by the employer

Can vary each year between 0% and 25% of compensation (maximum $57,000 for 2020 and $58,000 for 2021), and each eligible employee must receive the same percentage
Establishment deadline
SEP IRAs must be established and funded by your tax filing deadline plus applicable extensions.
Administrative
responsibilities
Employee notification of employer's contribution

Employers must fill out and retain Form 5305 SEP (PDF)Opens in a new window in their records.

No plan tax filings with IRS
Employee
responsibilities
Each employee must open an individual SEP IRA account.

Withdrawals10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply. Penalty-free withdrawals for qualifying first-time home purchase and certain college expenses. Required minimum distributions starting at age 70½.

Benefits

  • A retirement savings plan that allows an individual to contribute earnings until they are withdrawn.
  • Contributions are subject to annual limits depending on the age of the account owner and may or may not be deductible depending on the individual’s circumstances.
  • Earnings accumulate tax deferred until distributed to you at which time the earnings are subject to tax upon withdrawal.
  • A spouse may contribute to a separate account subject to the same limits.
  • Withdrawals made prior to age 59½ are subject to a 10% penalty unless certain special circumstances apply.
  • Distributions must begin by the account owner’s required beginning date (RBD), which is April 1 following the year that the account owner reaches age 70½.
  • Once the account owner reaches age 70½, he or she must withdraw at least a minimum amount called an annual Required Minimum Distribution (RMD).
  • If an account owner fails to withdraw the full amount of the RMD annually, or fails to withdraw the RMD, there is a 50% tax penalty that may be imposed by the IRS on the amount not withdrawn.

Minimum Investment

Account Minimums and Fees:

  • No income limitations
  • Contributions must be made in cash
  • Each state can establish their own minimums and maximums

Next Steps

If you know which IRA is right for you, open an account and complete the application. If you prefer to speak to us first, please schedule some time to discuss your investment goals and objectives.

Overview

A SEP IRA is a written plan that allows an employer to make contributions toward their own retirement and their employees’ retirement without getting involved in a more complex qualified plan. Under a SEP, the employer makes contributions to a traditional individual retirement arrangement (called a SEP IRA) set up by or for each eligible employee. A SEP IRA is owned and controlled by the employee, and the employer makes contributions to the financial institution where the SEP IRA is maintained. The employee may also make annual contributions subject to the limits for traditional IRAs.

Details

LimitUp to 25% of compensation
or $57,000 in 2020 ($58,000 in 2021), whichever is less
EligibilityMust be sole proprietor, a business owner, in a partnership, or earn self-employment income by providing a service

Contribution rules
Must be made by the employer

Can vary each year between 0% and 25% of compensation (maximum $57,000 for 2020 and $58,000 for 2021), and each eligible employee must receive the same percentage
Establishment deadline
SEP IRAs must be established and funded by your tax filing deadline plus applicable extensions.
Administrative
responsibilities
Employee notification of employer's contribution

Employers must fill out and retain Form 5305 SEP (PDF)Opens in a new window in their records.

No plan tax filings with IRS
Employee
responsibilities
Each employee must open an individual SEP IRA account.

Withdrawals10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply. Penalty-free withdrawals for qualifying first-time home purchase and certain college expenses. Required minimum distributions starting at age 70½.

Benefits

Tax advantages

  • Earnings grow tax-deferred
  • Distributions are tax-free
  • Gift and estate tax benefits

Education Savings Accounts

Account Minimums and Fees:

  • No income limitations
  • Contributions must be made in cash
  • Each state can establish their own minimums and maximums

Next Steps

If you know which IRA is right for you, open an account and complete the application. If you prefer to speak to us first, please schedule some time to discuss your investment goals and objectives.
Overview

Overview

A SEP IRA is a written plan that allows an employer to make contributions toward their own retirement and their employees’ retirement without getting involved in a more complex qualified plan. Under a SEP, the employer makes contributions to a traditional individual retirement arrangement (called a SEP IRA) set up by or for each eligible employee. A SEP IRA is owned and controlled by the employee, and the employer makes contributions to the financial institution where the SEP IRA is maintained. The employee may also make annual contributions subject to the limits for traditional IRAs.
Details

Details

LimitUp to 25% of compensation
or $57,000 in 2020 ($58,000 in 2021), whichever is less
EligibilityMust be sole proprietor, a business owner, in a partnership, or earn self-employment income by providing a service

Contribution rules
Must be made by the employer

Can vary each year between 0% and 25% of compensation (maximum $57,000 for 2020 and $58,000 for 2021), and each eligible employee must receive the same percentage
Establishment deadline
SEP IRAs must be established and funded by your tax filing deadline plus applicable extensions.
Administrative
responsibilities
Employee notification of employer's contribution

Employers must fill out and retain Form 5305 SEP (PDF)Opens in a new window in their records.

No plan tax filings with IRS
Employee
responsibilities
Each employee must open an individual SEP IRA account.

Withdrawals10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply. Penalty-free withdrawals for qualifying first-time home purchase and certain college expenses. Required minimum distributions starting at age 70½.

Benefits

Benefits

Tax advantages

  • Earnings grow tax-deferred
  • Distributions are tax-free
  • Gift and estate tax benefits

Minimum Investment

Education Savings Accounts

Account Minimums and Fees:

  • No income limitations
  • Contributions must be made in cash
  • Each state can establish their own minimums and maximums

Next Steps

Next Steps

If you know which IRA is right for you, open an account and complete the application. If you prefer to speak to us first, please schedule some time to discuss your investment goals and objectives.

Galleon IRA

The Galleon IRA helps you save and invest for retirement with the help of a dedicated financial adviser. You get access to our broad range of investment options, exceptional service, and investment guidance–with professional advice that is tailored to your specific financial and lifestyle goals and objectives.

Retirement Services

Our retirement services include debt, budget & risk management, expense monitoring, estate planning, and comprehensive investment management.

Retirement Solutions

Our approach takes the stress out of planning for retirement. Learn how our retirement strategies helped others to live life on their terms.

Retirement Planning

Mostly everyone dreams of a comfortable, secure, and meaningful retirement. This requires a stable income stream, less exposure to …

Life Events

Whether you’re getting married, having a baby, saving for college, reaching retirement, reaching a major milestone, or going through a major life event, you need to plan for it. Galleon Financial Planning works closely with each client to develop a plan that makes sense.

NAVI GA TE

A weekly email from Global Advisers about economic and political trends shaping markets, industries, and the global economy.