For the small business that would like to offer a retirement plan for employees but does not have the resources to fund a conventional plan, the Sep IRA provides a retirement safety net for the business and its workers. Flexibility of the Sep IRA appeals to small business owners because, unlike other kinds of IRA accounts, there is no set amount for contributions. The employer is allowed to change the amount and frequency of plan contributions based on the profits of the business, and might make these changes annually . If the company is a start-up with smaller profits, the employer simply sets up the Sep IRA with a modest employer match. As the business grows and profits become larger , the plan can be altered for larger contributions. If the business has a time of struggle, contributions could be lowered until the profits pick up again. A business will appreciate the simplicity of setting up the Sep IRA, done easily with a two page form. Each employee completes an investment application that is provided by the company that holds the investment funds. There is no required reporting to the IRS on annual returns, so any business can easily manage the whole process. Most small businesses decide to have their plan held by larger mutual fund companies, allowing their employees to select how they want to invest their money and eliminating the determination of investments from the employer’s responsibilities. The company’s employees decide for themselves. Owners of small businesses recognize the fact that with a Sep IRA plan, they can offer their workers a retirement plan as part of the benefit package, and perhaps attract a better caliber worker to a smaller company. Employees benefit as well , helped by their Sep IRA contributions building retirement security for them. The Sep IRA is easy to understand, easy to administer, and a wonderful program for small businesses and the individuals those businesses employ.
The Original Post is Located Here: Sep IRA – Flexibility and Simplicity