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Started By
Message
SEP/SIMPLE IRA
Posted on 10/23/20 at 8:05 am
Posted on 10/23/20 at 8:05 am
I am about to start work as an independent contractor/self employed. I will be 1099'ed for the work I do. I would like to start some sort of retirement plan for myself. Can anyone give me a brief synopsis of doing a SEP IRA and/or SIMPLE IRA and which one might be better for me? TIA
3
Posted on 10/23/20 at 8:12 am to jfw3535
been discussed ad infinitum here.
solo401k is what you need if you are the only guy and no employees. you can have one as a IC/sole proprietor or as a corporation. i had one for both as i am back to being a corporation again but i am the only employee.
here go through all this thread/post.
LINK
solo401k with checkbook control is what you want so you can invest in whatever you want, not just products from a brokerage. you want it so you can take out loans if you need it. pay yourself back plus prime interest technically making your contributions even bigger. you control it as you are the trustee and plan administrator.
LINK
solo401k is what you need if you are the only guy and no employees. you can have one as a IC/sole proprietor or as a corporation. i had one for both as i am back to being a corporation again but i am the only employee.
here go through all this thread/post.
LINK
solo401k with checkbook control is what you want so you can invest in whatever you want, not just products from a brokerage. you want it so you can take out loans if you need it. pay yourself back plus prime interest technically making your contributions even bigger. you control it as you are the trustee and plan administrator.
LINK
This post was edited on 10/23/20 at 8:27 am
Posted on 10/23/20 at 8:19 am to Fat Bastard
Thanks.
Posted on 10/23/20 at 8:32 am to jfw3535
you can contribute full amount from worker side then 20% of net pay from owner profit sharing side with a SP.
with a corporation you can do full mount as an employee and 25% of gross salary from owner profit sharing side which is what i do.
LINK
many companies, a couple listed in links above can setup a qualified retirement plan for you. You take it to a bank to setup a checking account for your 401k trust account. then you have full control. use it for real estate, stocks, etc.
with a corporation you can do full mount as an employee and 25% of gross salary from owner profit sharing side which is what i do.
LINK
many companies, a couple listed in links above can setup a qualified retirement plan for you. You take it to a bank to setup a checking account for your 401k trust account. then you have full control. use it for real estate, stocks, etc.
This post was edited on 10/23/20 at 8:38 am
Posted on 10/23/20 at 10:50 am to Fat Bastard
If it is just you then a SEP will be easier to have.
Posted on 10/23/20 at 7:57 pm to jfw3535
Talk to your CPA because 1099 income can’t be counted as compensation in some plans like SEPs. You might need to take the 1099 into an LLC then pay yourself a salary. I’m just not sure but be careful
Posted on 10/23/20 at 8:21 pm to jfw3535
Sep-ira's are easier to set up and maintain. They are straight forward.
Solo401ks really aren't that hard to set up, but once assets are over a certain amount there's additional paperwork that has to be filed annually.
Solo401ks have the ability to be more flexible in terms of investment...if you want such as a checkbook solo401k or you can treat it like most other retirement accounts and invest in stocks/bonds/mutual funds. Depending on your expected self-employment income, a solo401k may allow you to contribute more than a sep-ira. But they both have the same max contribution limits, so equals out over a certain income level. Lastly, solo401k allows you to keep a backdoor roth ira an option for additional tax diversification.
Solo401ks really aren't that hard to set up, but once assets are over a certain amount there's additional paperwork that has to be filed annually.
Solo401ks have the ability to be more flexible in terms of investment...if you want such as a checkbook solo401k or you can treat it like most other retirement accounts and invest in stocks/bonds/mutual funds. Depending on your expected self-employment income, a solo401k may allow you to contribute more than a sep-ira. But they both have the same max contribution limits, so equals out over a certain income level. Lastly, solo401k allows you to keep a backdoor roth ira an option for additional tax diversification.
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