SEP IRA

Archive for September, 2005

Question: Is my employer breaking the law with change of face on matching IRA contributions?

When I was hired, my employer told me they would match up to a 3% Contribution into our SIMPLE IRA at work. I just noticed that the company hadn’t matched any contributions since mid-2008. After informing my employer, the 2008 contributions were appropriately matched. However, the 2009 contributions were matched at only 1%. My employer then informed me that the company is only matching at 1% as of January 1, 2009. No one in the company was told of this change, not even the employee in charge of making the employer match contributions. Doesn’t the company have to inform the employees of this change? We have all been contributing 3%, as we were told we would be matched as much.

Answer: Joseph

No, but it would promote better faith in communications. Employers are not required to make any contributions to a retirement plan, and can make changes at any time.

Many employers are trying to keep their doors opens, and all their employees working. Trying to avoid layoffs.

I wouldn’t be harsh in this situation…

Soccerref

Question: can I take tax benefits for both a SEP IRA and traditional ira ? are there limits?

Answer: You need to download publication 590 on the IRS website. It is easy to read with a lot of examples. http://www.irs.gov

The Ballad of Ira Hayes – Kris Kristofferson

Question: Can I have both a SIMPLE IRA and a ROTH IRA? What are the Contribution limits for each?

Answer: The SIMPLE IRA is a low-maintenance retirement plan that offers many features of the more common 401(k) without the complexity, administrative burden and increased administration costs. The SIMPLE allows self-employed business owners or “side business owners” to defer up to a maximum of $6,500 a year (plus certain matching Contribution amounts) from their net business earnings
The ideal candidate for a SIMPLE is a self-employed individual who makes less than $35,000 and has the financial resources available to maximize retirement plan contributions. With a SIMPLE, the maximum Contribution would be $7,470 ($6,500 elective deferral portion plus a matching Contribution of $970) which is greater than the maximum amount allowed with a SEP or a combination Keogh plan.

The combined maximum allowed for the Traditional IRA and a Roth IRA is limited to $4,000 per year, or $4,500 for age 50 and over)