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SEP IRA Benefits

SEP IRA Contribution Limits

A SEP IRA allows generous contributions limits. The 2012 SEP IRA contribution limit is $50,000 and the 2011 contribution limit is $49,000.

Tax Deductible Contributions

Within IRS limits, contributions into a SEP IRA are generally 100% tax deductible.

Tax Deferred Growth

Interest earned in a SEP IRA grows tax-deferred. Dividends and investment earnings continue to grow without being taxed until you withdraw the assets. Withdrawals after age 591/2 are taxed as ordinary income. Withdrawals prior to age 59 1/2 may incur a 10% IRS penalty as well as income taxes. At age 70 1/2 Mandatory Required Distributions are required.

Contribution Flexibility

Contributions into a SEP are completely discretionary. The percentage of contribution can vary year to year or can be stopped depending on profitability.

Low Cost and Easy Administration

SEP IRA accounts are inexpensive, easy to setup and maintain and do not require annual IRS filings.

Retirement Plan Consolidation

Retirement plans can be rolled over and consolidated into a SEP. This includes Traditional IRAs, 401k Plans, Money Purchase Plans, Profit Sharing Plans, Defined Benefit Plans, 403b Plans and Rollover IRAs. A Roth IRA or retirement accounts that have after tax contributions can not be rolled over into a SEP IRA.

SEP IRA Frequently Asked Questions

SEP IRA FAQs. Find answers to your questions about the SEP IRA.

 

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Disclosures:

*The information on this page is for informational purposes only and does not constitute, and should not be construed as, professional, legal or tax advice. To determine your individual tax situation and specific needs, please consult a professional tax advisor.

*Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.