Flexible Retirement Planning For Entrepreneurs With SEP IRAs

With SEP IRAsOne of the greatest benefits of being self employed, or a small business owner, is the lifestyle flexibility. Most entrepreneurs report working more than they had at their previous jobs, but value the freedom, and independence gained from being their own boss. With SEP IRAs that lifestyle flexibility finally extends to retirement savings options.

Traditional IRAs lock a saver into limited options offered by the employer’s plan, generally these will primarily be equity, or bond-based mutual funds. While these can be good choices for retirement savers, the investing world is far larger than just equities and bonds. A SEP IRA allows a business owner, and their employees, the opportunity to invest in broader asset classes including precious metals, and real estate! Real Estate investments can also be broken down into physical real estate investment, or into lending money for someone else to use to acquire real estate which gives you the ability to reap the benefits of fixed interest payments on your loan, without the headache of managing tenants or construction.

On top of the investment flexibility provided, another benefit over traditional IRA programs is the higher contribution limits. Traditional IRAs are limited to $6,000 annually while SEPs allow for up to 25% of compensation up to an annual maximum of $61,000, over ten-times that of a traditional IRA. All of these benefits are provided with generally lower administration costs, and fees, than a traditional IRA. With high contribution limits, low fees, and flexibility, a SEP IRA could be an important tool for self-employed retirement savers.

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