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Employee Pension Plans SEP |
Employee Savings Match IRA |
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Benefits |
- Contributions are tax deductible to employer
- Helps attract and retain employees
- Easy to set up and administer
- No extra reporting to IRS is necessary
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- Contributions are tax deducible to employer
- Helps attract and retain employees
- Low cost alternatives to 401K plan
- No extra reporting to the IRS is necessary
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Eligibility |
- No special requirements for employees
- Employees must meet eligibility requirements
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- Employer must have 100 or fewer employees and have no other retirement plan
- Employer must use IRS forms to set-up
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Annual Contribution Limits |
25% of earned income for the years in which you contribute
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- $10,000 per year
- Employees who attain the age of 50 before the close of the
year may make additional (catch-up) contributions as follows:
- 2005 -$2,000
- 2006 and beyond - $2,500
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Withdrawals |
- Taxable
- Allowed
- Other exceptions may apply such as death, disability, home purchase, education, medical expenses, etc. (withdraw up to $10,000 in your lifetime for first home)
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- Taxable
- Allowed
- Other exceptions may apply such as death, disability, home purchase, education, medical expenses, etc. (withdraw up to $10,000 in your lifetime for first home)
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Distribution Requirements |
Must begin to take contributions by April 1st of the year
after you become 70 1/2 years old
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Must begin to take contributions by April 1st of the year after you become 70 1/2 years old
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Tax Deductions for Contributions |
Employer IRA contribution may have an impact on tax deductibility of contributions to individual IRA
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Eligible employees who want to participate can contribute pre tax dollars
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