Learn about the differences between a Self-Directed IRA and Self-Directed SEP IRA in our video. To explore more, read our blog: www.madisontru...
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SCRIPT
In today’s video, you’ll learn about the differences between a Self-Directed IRA and a Self-Directed SEP IRA.
What is a Self-Directed IRA?
A Self-Directed IRA is similar to a standard IRA - you open and fund your account and invest in assets to help grow your savings so you can retire one day. A Self-Directed IRA allows you to invest in alternative assets. As with a standard IRA, anyone can open a Self-Directed IRA as long as they earn taxable income.
What is a Self-Directed SEP IRA?
A Self-Directed Simplified Employee Pension, or SEP IRA, is a simple, affordable retirement plan for self-employed individuals or small business owners with a few employees. As an employer, you may contribute to the account for yourself and your employees.
Compared to other standard IRAs, like a Traditional IRA or Roth IRA, a Self-Directed SEP IRA allows you to make larger contributions while investing in alternative assets, like real estate, precious metals, and private placements. In 2024, employers can contribute a maximum of $69,000 per participant but no more than 25% of their compensation.
How Does a Self-Directed SEP IRA Work?
A Self-Directed SEP IRA is generally easy to set up and operate and likely comes with low administrative costs. You, the employer, will make the tax-deductible contributions for yourself and your employees.
You will need a Self-Directed IRA custodian, like Madison Trust to administer your Self-Directed SEP IRA. Your custodian will handle administrative tasks, hold custody of your assets, and act on your behalf as instructed. Since a custodian is not a financial advisor, it’s your responsibility to perform due diligence on your investments.
Who Can Open a Self-Directed SEP IRA?
A Self-Directed SEP IRA is worth exploring if you (or your employees) are at least 21 years of age, have worked for your business for at least three of the last five years, have received at least $750 in compensation for 2024, and consider yourself any of the following:
A Self-Employed Individual
A Small Business Owner
A Sole Proprietor
A Partnership & LLC
A Consultant, Freelancer & Entrepreneur
If you're interested in either a Self-Directed IRA or a Self-Directed SEP IRA, call us today to get started!
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7 окт 2024
