As a Lockheed Martin employee, you are highly skilled and often in demand, but sometimes employees have a calling, interest or desire to do some other type of work on the side or after retirement.  Oftentimes, your spouse may be self-employed as well.  If either one of these sounds like you or the you in the future, then this is the blog to read.

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Did you know that as a self-employed individual, you can save additional dollars for retirement in a special tax-deferred account designed specifically for self-employed persons and small business owners?  That’s right, you can establish a Simplified Employee Pension plan if you are your own employer.  Simplified Employee Pension plans are also referred to as SEP IRAs.  They are ideal for self-employed individuals, small-business owners, or members of a partnership, mostly due to their low cost and simplicity.

A SEP IRA will allow you to invest dollars in a tax-deferred account just as you would in a traditional IRA.  This gives you the opportunity to save much more towards retirement over and above your 401(k) and your traditional or Roth IRA, and you can invest those dollars into a limitless variety of investments.  As for how many dollars you can set aside, for 2021, the IRS has set the contribution limit to $58,000 or 25% of your eligible compensation, whichever is lower. Contributions can be made to your SEP IRA account any time during the calendar year or the following year prior to filing your taxes or April 15th, which ever comes first.

Now, it is important to note that the SEP IRA does still have the same rules as a traditional IRA:

  • Withdrawal of funds prior to age 59½ may be subject to a 10% early withdrawal penalty, along with any applicable income taxes1
  • You can make a withdrawal from your SEP IRA prior to age 59½ without incurring the early withdrawal penalty in specific circumstances, including health insurance premiums paid while unemployed, higher education expenses, or a first home purchase
  • You can’t borrow from a SEP IRA
  • You can roll your SEP IRA assets into another IRA
  • You can roll assets from another retirement account into your SEP IRA
  • You must take required minimum distributions from SEP IRAs beginning at age 722

If you have a small business with employees, then the rules are expanded.  That’s certainly something you’ll want to discuss with us in a personal consultation.  Is this type of account right for you?  You won’t know until you meet with us.  As Lockheed Martin specialist, we are experts at providing advice and recommendations for your investment and retirement needs! Call us today at 817-210-3444 to book a complimentary consultation!

For more tips like these, click here to sign up for our weekly email blog newsletter. If you would like to get better educated on Lockheed retirement strategies, click here to download our Free Report titled Retire with Confidence: The Top 4 Things You Can Do Now to Maximize your Lockheed Retirement. And, if you want to have face time with a Lockheed Retirement Specialist², you can click here to schedule an appointmentclick here to sign up for our Lockheed Retirement Workshop or click here to just give us a call (817) 210-3444.

Be sure and check back next week for more incredibly valuable information. Cheers!

Disclosures*

Financial Planning and Investment Advisory offered by SWMG, LLC a Registered Investment Advisor.

Lockheed Martin Retirement Specialist is not an official title or professional designation nor is it conferred by Lockheed Martin on any individual or company.

Our Complementary consultation and free report are for informational purposes only and provided free without any obligation to utilize or retain our investment advisory services.

SMWG, LLC is not affiliated with or endorsed by Lockheed Martin Corporation. Our expertise comes from working with LMT employees for several years and helping them to retire with confidence.

Investing involves the risk of loss, including loss of principal. Past performance does not guarantee future results. Investment products are not FDIC insured, have no bank guarantee, and may gain or lose value. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be profitable for a client’s investment portfolio.

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