When Is The Sep Ira Contribution Deadline & Other QuestionsJust thinking about your retirement and the rules, benefits, withdrawals, contributions and regulations surrounding IRA contributions is mind-boggling to say the least. There are several options for you to choose from and each has its own pros and cons. What about a Roth IRA? What about a traditional IRA? What about a SEP IRA? One question you may ask is, “When is the SEP IRA contribution deadline?” Another question might be, “What are the differences between these IRA’s?” And, you probably have other questions as well. This article will answer some of the most frequently asked questions about Individual Retirement Accounts (IRA’s) and will help you make the final decision on which one would work best for you. It’s sometimes to your advantage to consolidate your investment funds into one account. That way, you can easily keep track of and adjust your investment as is necessary. Starting an IRA account or just rolling over other investments you currently have into an IRA account is something to consider. Some of the IRA accounts that you can take a look at are: traditional and roll over, Roth and SEP. • Traditional and Roll Over – If you participate in a traditional IRA plan you will fund it with before tax dollars. Your earnings are allowed to grow tax deferred. However, you will be penalized if you withdraw any of these funds prematurely and also will be taxed at the time you are under age 59 ½. Certain exceptions such as death, disability or financing first home purchase are applicable with this plan. • Roth IRA – These plans are funded by your after-tax dollars. In a nutshell, this means that you don’t receive any deductions on your contributions made to this account. The growth of your Roth investment is tax-deferred however and the same penalties as a traditional IRA apply to Roth as well. One advantage to a Roth is that qualified withdrawals are tax-free so that you will benefit if you are in a higher tax bracket when you reach retirement age. • SEP (Simplified Employee Pension Plans) – These plans are set up exclusively for self-employed individuals and for small business owners. The funds within the plan are tax-deferred like a traditional IRA until they are withdrawn. The contributions you are allowed to make are higher with an SEP, making this plan more advantageous for you. All contributions made by SEP employers must be made to each individuals SEP IRA before the employers tax-filing deadline. |