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