The Simplified Employee Pension – Individual Retirement account (SEP-IRA) is the simplest, easiest, cheapest, and most common retirement plan available. Unlike other tax qualified retirement plans, there is not an expensive and cumbersome plan document. There is not an expensive tax form to file each year. Also, there are no complex discrimination tests. The business owner can contribute up to 25% of his adjusted gross income or his w-2 wages if he is incorporated to a maximum amount of $45,000 per year.

Efficient: You can rollover any outstanding 401k accounts from prior employers. You can tidy up your investment files by rolling over any old IRA accounts as well.

Control: In the event, you do have employees, you are able to exclude employees younger than the age of 21 and those that do not have three years of service with your business. After an employee has worked for you for three years and is over the age of 21, the employee will be able to participate in the plan and receive contributions. The employee will be 100 % vested in their account balance immediately. This means that the employee could leave the firm and take his account balance with him from that day forward.

Flexibility: In the event, your business has a slowdown and cash flow may be tight, you are not committed to contributing to the plan every year.

Diversity: Like the Self Directed IRA, you have a broad range of investments available to invest in.

Accumulation: In ten years, on a tax-deferred basis, you can accumulate $593,135 at 6% at the maximum contribution rate. In twenty years you can accumulate $1,655,351 and in thirty years you can accumulate $3,557,618. This is nothing to scoff at!

Often you will be able to make more money in your business than in your investment account. But we are here to help you accumulate wealth outside of your business in order to present it back to you upon your future need and or retirement. We are caretakers of your funds.
I am forever searching for more pockets to shelter and grow your wealth in by providing clarity through the use of these financial tools. I am Corey Callaway of Callaway Financial Services, Inc. Remember before you give it away, call Callaway. All securities are offered through Callaway Financial Services, Inc. member NASD & SIPC. For additional information on this topic, contact us at info@callawaycapitalresource.com, subject line the title of the article.


Corey N. Callaway

Investment Advisor Representative

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