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New SEP IRA ideas
Posted on 11/16/23 at 11:28 am
Posted on 11/16/23 at 11:28 am
We are doing SEP IRAs (business partner and I). It will be the full 66K. This is not my primary retirement model, we have that in another vehicle. This is basically a tax deferment for us. It looks like we should be able to max it again the next 2 years at least.
What advice i'm looking for is what to invest in. I'm 56, I'll be able to access at 59.5 so it's more of a savings than retirement. (If I don't need it, I wont get it but this will be part of the safety net for short term, near future needs.)
I have about 375K in a 5% MM which I'm sitting on but may use for some real estate stuff soon. I need ideas for the next 3 years what to put the SEP in. I'm pretty risk averse at my age. I can do 5% with cash and that may be the safest bet as long as it lasts but is there something else low/no risk for 3 years? I've lost my butt before and don't want to go down that path again.
What advice i'm looking for is what to invest in. I'm 56, I'll be able to access at 59.5 so it's more of a savings than retirement. (If I don't need it, I wont get it but this will be part of the safety net for short term, near future needs.)
I have about 375K in a 5% MM which I'm sitting on but may use for some real estate stuff soon. I need ideas for the next 3 years what to put the SEP in. I'm pretty risk averse at my age. I can do 5% with cash and that may be the safest bet as long as it lasts but is there something else low/no risk for 3 years? I've lost my butt before and don't want to go down that path again.
4
Posted on 11/16/23 at 12:40 pm to XenScott
Are you retiring in 3.5 years?
Posted on 11/16/23 at 12:48 pm to XenScott
If you’re treating it as a pseudo emergency fund then I’d stick to money markets and possibly 2-3 year CDs/government bonds/agency bonds
Posted on 11/16/23 at 1:02 pm to XenScott
If you are maxing out the SEP, you are crushing the biz game my friend. Congrats.
Posted on 11/16/23 at 4:09 pm to Shepherd88
quote:
Are you retiring in 3.5 years?
No. I am getting to the age where I can do some things with IRA funds though.
Posted on 11/16/23 at 4:13 pm to XenScott
Right but you’re not really helping yourself out with the tax deferral if you’re gonna pull it out in 3 years. If you’re still working then you’re likely gonna make your tax situation more burdensome. so you need to prepare for that or change your time frsme of investment
Posted on 11/16/23 at 5:30 pm to Shepherd88
how does the SEP contribution work with business income operating as a S Corp? Is the calculation of what you can put in based off of the "salary" or can it be off of the total income?
Posted on 11/16/23 at 7:41 pm to WhoGeaux
25% of W2 or 66K max. Company contributes the money. Had to be offered to all W2 employees. It is considered an expense for the company, taxes deferred for recipient.
Posted on 11/17/23 at 5:28 am to XenScott
Risk comes in many forms.
Loss of capital is certainly a risk.
So is loss of purchasing power- inflation.
Even at 80, I want to suggest that accounts have stock exposure. It should have cash instruments, but there is a stock element to mitigate the risk of outliving funds.
Loss of capital is certainly a risk.
So is loss of purchasing power- inflation.
Even at 80, I want to suggest that accounts have stock exposure. It should have cash instruments, but there is a stock element to mitigate the risk of outliving funds.
Posted on 11/17/23 at 7:47 am to XenScott
I am trying to find out if I have to pay SEP benefits to hourly employees. We only have salaried employees but want to hire some hourly. If I have to I will hire them as a contractor.
I am establishing a relationship with a tax attorney to answer questions like this.
I am establishing a relationship with a tax attorney to answer questions like this.
Posted on 11/17/23 at 8:48 am to XenScott
So basically money utilized for SEP you would have to pay payroll tax on?
Posted on 11/17/23 at 9:01 am to Shepherd88
quote:
Right but you’re not really helping yourself out with the tax deferral if you’re gonna pull it out in 3 years. If you’re still working then you’re likely gonna make your tax situation more burdensome. so you need to prepare for that or change your time frsme of investment
I won’t pull it unless I need it. If I need it my tax situation would be more favorable.
I’m in a very volatile business with the current policies. Very up and down.
Rainy day insurance is a way to look at it.
This post was edited on 11/17/23 at 9:05 am
Posted on 11/17/23 at 9:36 am to WhoGeaux
quote:
how does the SEP contribution work with business income operating as a S Corp? Is the calculation of what you can put in based off of the "salary" or can it be off of the total income?
It's based on S Corp "salary" not total income.
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