![]() ![]() And, as an employer, you're required to contribute the same percentage of an employee's compensation as you contribute for yourself. However, there are a few caveats if you have employees.įirst, all contributions are made by the employer, not the employee. Annual contributions can be as high as 20% of net self-employment income for an owner, up to $61,000 in 2022. It also gives you the flexibility to vary contributions-or skip them entirely-according to your yearly business needs.Ī SEP-IRA can be ideal for a sole proprietor. It's easy to open and lets you make fairly high annual contributions. ![]() SEP-IRA: The easiest to set up and maintain, particularly suited to sole proprietorsĪ SEP-IRA (or a Simplified Employee Pension) can be a great choice for saving a lot and keeping paperwork to a minimum whether or not you have employees. All provide tax advantages without the paperwork, cost, and administration required by a 401(k), but do have different characteristics that might make one plan better than another for her needs. Incorporation isn't the key factor here, but rather whether your wife has employees and, if so, how many. Here are some small business retirement plans for your wife to explore. That's because, although contributing to an IRA is definitely a good idea, small business owners have several other options that can significantly increase the amount they can save in a tax-effective way. This is an excellent question for every small business owner-whether firmly established or just starting out. What's her best option for retirement savings right now? Three years ago, she incorporated the company and they don't have a 401(k) yet. My wife started a business 10 years ago and contributed to a regular IRA in the beginning. Join us at these conferences, webcasts, forums.Schwab Self-Directed Brokerage Account Indicator Reports.Schwab Retirement Plan Services Participant Survey.Schwab Personal Choice Retirement Accounts®.View resources from The Charles Schwab Corporation. Current market volatility represents unprecedented times for employers and employees to navigate. ![]()
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