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Does anyone have insight on which institution I should look to open a SEP with? I know there are banking institutions and brokerage firms. Where do you think is the best place to open this type of account. Thanks.
Sep Ira
- Thread starter JohnWalker
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What are you going to invest the Sep into????? CDs, Bonds, Mutual Funds, Stocks, Etc. That determines where you go. All a SEP is is a type of qualified account. It can be in many shapes and forms.
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Thanks thats great explanation.
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- 10,589
It depends on what you plan to invest in and what your goals are.
Here is a good thread that is about SEPs and solo401Ks.
So what type of funding (investments/savings) are you interested in for your SEP?
It's more about choosing how you want to save/invest and then making it a SEP.
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Not a bad choice. With Scott or Etrade you can invest in Stocks, Bonds, Mutual Funds, Exchange Traded Funds, Money Markets, etc. You could also open a SEP with a Mutual Fund family if there is one you like. You could also set up a SEP in a qualified fixed or index annuity that you sell yourself.
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A SEP is just a tax code classification that can be attached to certain assets.
When you fill out the paperwork for an asset, most often, whomever issues those assets or sells you those assets are able to help you classify them as a SEP. You simply file a 5305-SEP form which makes those contributions tax deductible.
When you fill out the paperwork for an asset, most often, whomever issues those assets or sells you those assets are able to help you classify them as a SEP. You simply file a 5305-SEP form which makes those contributions tax deductible.
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Great information everyone thank you. I was thinking a SEP over a solo 401k because my business is still fairly new and I am only 25. At this time, I still see my business as main vehicle for investing and growing my income. A yearly limit of 50,000 is more than enough for now and if I need more I can always get married and add my spouse to the payroll and get up to 100k. I wanted to clarify that I do not have to offer employees that have been with me for under 3 of the last 5 years max access to the Sep correct?
Can I convert the Sep account or roll it over to a solo 401k later down the line if I don't want to provide retirement for employees?
Can I convert the Sep account or roll it over to a solo 401k later down the line if I don't want to provide retirement for employees?
You cannot have a solo 401k if you have employees (except for a spouse or a part-timer).
This should answer a lot of your SEP questions:
SEP Plan FAQs
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- #10
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That's good to know I had not looked into solo 401k's because I was pretty sure I was going to get a SEP but others here recommended it as an option. Is there any retirement plan that allows me to put away the same limits as a SEP and does not force me to eventually offer it to my employees? Eventually it may be an option I offer to select individuals but I don't want to be forced to contribute to someones retirement just because they do sales for me... Does something like this exist?
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