Which employer sponsered plan would you prefer?

Business & Finance
Tutor: None Selected Time limit: 1 Day

Hello Im learning Unit4 Saving and Investing.

In at least 2 paragraphs, explain why you would prefer one retirement plan instead of th other two (A SEP IRA, Simple IRA, and a 401 (k).

Would you like to help me pleasee :(

Jul 17th, 2015

Thank you for the opportunity to help you with your question!

I would prefer SEP IRA because of the below advantages:

Tax Benefits

Contributions your employer makes to a SEP IRA on your behalf aren't included in your taxable income. If you're self-employed, or make contributions to your SEP IRA yourself, you can deduct your contributions on your tax return. However, SEP IRAs cannot be Roth IRAs, which means you're stuck with the tax-deferred savings option even if you would prefer to have your retirement savings be made on an after-tax basis.

Contribution Limits

IRA contribution limits typically are much lower than employer-sponsored plans. For example, in 2015, you can contribute up to $5,500 to a traditional and Roth IRA combined per IRS rules, but up to $18,000 in employee contributions and $52,000 total for 401(k) plans.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 17th, 2015

Thank you but can you explain that in your own words?

Jul 17th, 2015

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