International Funding

a.k.a. “Simplified Employee Pension plan”

It is as easy and low cost to set up and maintain as the SIMPLE IRA. But instead of the employee making contributions to the plan with a match from the employer, the employer makes the entire contribution.

Self-employed workers may find the SEP ideal due to its low setup and maintenance costs. Business owners can save quite a bit more in a SEP than the SIMPLE or other IRAs. For 2009, the contribution limit is 25 percent of net income up to $49,000.

As an example, say you receive $5,000 for a product, but you spent $1,000 on supplies and Web advertising to make that sale.

That $1,000 subtracted from the $5,000 gives you $4,000 net. The net income is what your pension contribution is based on.

• Who can open one: Any employer or self-employed person.
• Cost and complexity: Low.
• Employer contribution limit: 25 percent of employees’ net income up to $49,000.
• Employee contribution limit: Not applicable.
• Annual reporting requirements: None.

business owner, Business Plan, contributions plan, Employee Pension Plan, Finance Management, pension contribution, profit margin, retirement plan, saving money, self-employed

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