Retirement Options for Self-Employed Individuals

With the present economic condition, finding a regular job has become very tough, whether or not you are a skilled or not. That is why self-employment has become very common. The good thing about this is that the trend includesretirement plans for self-employed individuals. These retirement plans ensures that in the future, you will be financially secured. Here are some examples of the most common retirement plans for the self-employed: 401K plans You may have already herd about this, though this is the newest retirement plans there is. If you are fifty years of age and below, the limit of contribution is $16,500. And for people aged fifty and more, the limit is $22,000. The great thing about 401k plans is that you can make up to 20% of your earning as additional contribution and the tax benefits are way better than SEP. IRA retirement plan IRA or Individual Retirement Account on the other hand is another good option. In this type, people with ages fifty and below can contribute to up to $5,000 and $6,000 for people fifty and up.

If you opt for this plan, it is better if you do not have other retirement plan coverage so that tax deductions and conflicting issues would be prevented. SEP IRA plans SEP IRA or Simplified Employee Pension IRA is as the name suggests. It is somewhat similar to regular IRA but you can contribute to up to 20% of your earnings or to up to $49,000. This plan does not require mandatory contributions, meaning you can pay half of this year’s contribution and the other half later on or make one full contributions. This is the most common retirement plan that self-employed individuals opt for. The only disadvantage of this plan is that making a loan is not permitted. There are other more options to choose from. But the best thing to do is to hire a financial advisor to helpyou make the right decision. Since this is a life changing decision, you surely don’t want to make a mistake. A proper advice from a financial advisor will give you even more options.