SEP (Simplified Employee Pension Plan)
A flexible retirement plan for employers and employees
A SEP (Simplified Employee Pension) Plan is a great option for small businesses and sole proprietors because it allows them to offer a company retirement plan - and participate in it themselves - with minimal paperwork or costs compared to other qualified plans.
Work at saving today…enjoy your retirement tomorrow:
- Tax deductible for employers: a tax deduction is given to employers for their contributions
- Flexibility: employees can use the same account for both SEP contributions and traditional IRA contributions.
- Contributions: Employers can make contributions, on a discretionary basis, into an SEP IRA that is designated for each eligible employee. Employees do not make contributions and are not taxed for the contributions.
- Withdrawals: Withdrawals are taxed as ordinary income. Qualified withdrawals can begin at age 59 ½ and must begin by age 70 ½. However, you may withdraw money from your SEP IRA without penalty in a number of other circumstances:
- Purchase of a first home
- Death or disability
- Taking equal periodic payments
- Payment for certain health insurance, medical expenses, or higher education expenses
A BestBank employee can walk you through the steps of setting up a SEP for your business. Click here to find a branch near you.
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