What are the different types of self -employed pension plans?

The four main types of self -employed pension plans in the US are simplified employee plans (SEP), an economical motivational match plan for employees (simple) plans, solo or individual plans 401 (K) and KEOGH plans. While all contributions are deductible, all these self -employed pension plans have different limits of contributions, deadlines and other provisions. Employees can generally set up plans themselves, but KEOGH plans usually require the assistance of a financial worker, especially when creating plans defined benefits. Individuals in other countries should consult with their government policies to see different ways to initiate pension accounts, because laws and procedures will change for each country. Workers can contribute up to 20% of their net profit up to a maximum limit of 49,000 Sectiondlars (USD) for 2011. The normal date is 15 April, although the deadline of October 15 is available to those whothey give an extension.

IRA plans are for self -employed persons who want to start pension accounts for 100 or less employees. Employees and employers can contribute to accounts and postpone taxes that would apply to account profits. Employers can contribute a fixed rate of 2% of the employee's payout per year or a variable rate that corresponds to employees' contributions up to 3% per year. Employee's allowance limit for 2011 is $ 11,500. Employees can take simple IRA savings with them if they leave the company but cannot borrow against accounts as with traditional 401 (K) pension accounts.

Created in 2001, Plans Solo 401 (K) are self -employed pension plans that act as common 401 (K) ACCOUNTS, allowing individuals to contribute tax deductible contributions that grow the tax postponed. The maximum contribution for 2011 is $ 49,000 USD or $ 54000 USD for workers over 50 years of age. Workers who are regularly employed are self -employed can have traditional and self -employed pension plans.

KEOGH plans can allow employers to set up either a defined contribution or defined plans for themselves and their employees. Defined posts decrease are either the plans of purchasing money that requires 10% net profit per year, and profit sharing plans that do not require a specified amount that will contribute annually. On the other hand, the plans of defined benefits provide employees with a fixed amount of the dollar annually after retirement and generally require professional assistance to calculate the right amounts. Factors such as life expectancy and estimated future profits help to determine this amount of the dollar.