| Do you work for a small business or for yourself and | | | | for a SEP? The employee must have worked for the |
| want to know if you will be safe and secure when | | | | employer for at least three of the last five years, they |
| you retire? Small businesses or self-employed | | | | must be at least 21 years of age, and has received |
| individuals can provide benefits so you or the individual | | | | from the employer at least $400 in compensation in |
| can have peace of mind. They can set up Simplified | | | | the tax year. An employer can establish less restrictive |
| Employee Pension (SEP) plans. A SEP plan allows an | | | | participation requirements for its employees than those |
| employer to make contributions toward an employees' | | | | listed, but not more restrictive ones. The eligibility rules |
| retirement, and if self-employed, his or her own | | | | must be applied on a persistent basis to all employees |
| retirement. The SEP rules permit an employer to | | | | including self-employed individuals. Simplified Employee |
| contribute and deduct each year to each participating | | | | Pensions is one way that small businesses can provide |
| employee's SEP-IRA up to 15% of the employee's | | | | retirement for their employees. There are several |
| compensation or $30,000, whichever is less. Bonuses | | | | ways that one can plan for the future. Any employer |
| and overtime are included in the employee's | | | | can establish a SEP. The investments are managed |
| compensation. Simplified Employee Pension Plans are | | | | by the each individual employee. Simplified Employee |
| funded by employer contributions only. A | | | | Pension plans are very easy to set up and will make |
| self-employed owner's contribution is based on net | | | | you feel better knowing that you have something to |
| profit minus one-half- self-employment tax minus the | | | | look forward to when you decide to retire. You can |
| contribution for him or herself. To determine the | | | | freely reprint this article as long as the author, bio, and |
| contribution and deduction amount you must see IRS | | | | live links are left intact. |
| Publication 560 which is used for Retirement Plans for | | | | More articles from this pro: S. |
| Small Businesses. What makes an employee eligible | | | | |