When you have your own business, there are many things to consider. Am I earning enough to support my family? Am I saving enough? Are my employees paid fairly? Am I a responsible employer? One way to answer Yes to these questions is to adopt a SEP IRA, or Simplified Employee Pension Individual Retirement Account. This type of account can provide retirement benefits for business owners and their employees.
Why is it Important to Open a SEP IRA For Yourself and Your Employees?
When you open a SEP IRA for yourself and your employees, you are insuring a financial future for everyone involved in your small business. It can increase productivity. It may also create a better work environment because when you open a SEP IRA, you are investing in your employees’ futures as well as your own. When an employee knows that their future retirement is being invested in, they may work better and happier in the knowledge that there will be money there once they retire. An investment in your employees is an investment in the future of your small business.
What Is the Difference Between a Traditional IRA and A SEP IRA?
There is little difference between a SEP IRA and a Traditional IRA. The contributions are still tax-deductible. This means that both a business owner and his employees may benefit immediately from this tax break. There are some restrictions for a SEP IRA. An employee must work for the company at least three years and must be at least 21 years old to be eligible for a SEP IRA. Otherwise, the SEP IRA is very similar to a Traditional IRA. Employees can use a retirement calculator to figure out the advantages there.
Whether you are investing in new equipment or advertising for your small business, investments help you and your business grow. By providing a SEP IRA for you and your employees, you are also investing in your company’s future growth. By planning for a solid financial future for you and your employees, you can rest in the knowledge that your small business is working hard for your retirement.