Saving for your future isn't optional. But when it comes to how you save, there are plenty of options. While most people include an individual retirement account (IRA) among their retirement savings tools, not all IRAs are created equal. One valuable IRA option for small businesses and people who are self-employed, is the SEP (Simplified Employee Pension) IRA.
What is an SEP IRA?
An SEP IRA is an individual retirement plan that allows employers to make tax-deductible contributions on behalf of employees—including self-employed individuals. For example, in a sole proprietorship, you would be both the employer and the only employee. In this case, you'd be able to make tax-deductible contributions into your own retirement account, without having to meet the eligibility requirements of traditional IRAs. Employers receive tax deductions for plan contributions, which are made to each eligible employee's SEP IRA on a discretionary basis.
What are the benefits?
Like traditional IRA funds, money in an SEP IRA can grow, tax-deferred, until retirement. During retirement, when money is withdrawn, the funds are taxed at the same rate as ordinary income. With no minimum annual contribution, businesses can forgo making contributions in leaner years. An SEP IRA can provide the flexibility small businesses and sole proprietorships need to provide for themselves and their employees' retirement.
Where do I begin?
Consider Ally Bank for your SEP IRA account. With IRA High Yield 12-Month CDs, Raise Your Rate 2- and 4-year CDs and an IRA Online Savings Account, you can start an SEP IRA and take advantage of our competitive rates to help maximize your savings growth. In fact, rates on all our certificates of deposit (CDs) are consistently among the most competitive in the country. Without the overhead of brick-and-mortar banks, Ally Bank can pass the savings on to customers in the form of great rates. Plus, we compound interest daily to help your retirement savings grow even faster. Some banks compound monthly, quarterly or even annually. If you’re looking for ways to reach your retirement goals, Ally Bank can help.
Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559).
Ally Bank, member FDIC