SEP IRA vs. 401k: The Ultimate Guide for Small Business Owners | Deep Dive

#SEPIra #401k #SmallBusinessRetirement #katie_st_ores

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Welcome back to Deep Dive with Katie St Ores, where we break down complex financial topics into easy-to-understand insights! Today, we're comparing two popular retirement savings plans for small business owners and the self-employed: the SEP IRA and the 401k. Choosing the right plan can significantly impact your retirement savings and your business's bottom line. We'll explore the key differences, benefits, and drawbacks of each to help you make the best decision for your unique situation.

Are you a freelancer, consultant, or small business owner? Do you want to save for retirement but aren't sure where to start? The SEP IRA and the 401k are two excellent options, but they work very differently. In this video, we'll cut through the jargon and provide clear, actionable advice.

Here's what we'll cover in this detailed comparison:

The Basics: What are SEP IRAs and 401ks? We'll explain the fundamental structure of each plan, including who can contribute and how they work.

Contribution Limits: How Much Can You Save? We'll compare the contribution limits for both plans, highlighting the potential for higher contributions with a 401k, especially for business owners.

Employer vs. Employee Contributions: A key difference! We'll explain how SEP IRAs are solely funded by the employer, while 401ks allow for both employer and employee contributions.

Administrative Burden: Which is Easier to Manage? We'll discuss the simplicity of SEP IRAs versus the more complex administration of 401k plans, including IRS filings and compliance testing.

Flexibility: How Much Control Do You Have? We'll explore the flexibility of each plan, including contribution schedules and investment options.

Tax Advantages: Pre-Tax vs. Roth Options. We'll compare the tax benefits of each plan, including the availability of Roth 401ks for after-tax contributions and tax-free withdrawals in retirement.

Loans and Withdrawals: Accessing Your Funds. We'll discuss the rules surrounding loans and withdrawals from each plan, including potential penalties for early withdrawals.

Who Benefits Most? We'll provide specific recommendations for different business scenarios, including sole proprietors, small businesses with few employees, and growing companies.

By the end of this video, you'll have a clear understanding of the pros and cons of SEP IRAs and 401ks, empowering you to choose the plan that best aligns with your business goals and retirement needs.

Don't forget to like this video, subscribe to the Deep Dive channel for more valuable financial insights, and hit the notification bell so you never miss an episode! Share this video with any business owners or self-employed individuals who are looking for retirement savings solutions. What questions do YOU have about SEP IRAs or 401ks? Let us know in the comments below!

Additional 401k, retirement podcasts:

SEP IRA vs. 401k: The Ultimate Guide for Small Business Owners | Deep Dive

Which Retirement Plan is Right for Your Business? SEP IRA or 401k? | Katie St Ores

Maximize Your Retirement Savings: SEP IRA vs. 401k Comparison | Deep Dive Podcast

SEP IRA vs. 401k: Choosing the Best Retirement Plan for You | Katie St Ores