Question

There are many different types of retirement accounts such as Individual Retirement Accounts (IRAs), Roth IRAs,...

There are many different types of retirement accounts such as Individual Retirement Accounts (IRAs), Roth IRAs, Keogh Plans, Simplified Employee Pensions (SEPs) and 401(k), and Simple IRAs. Of all of these retirement accounts, which one would you recommend to a self-employed business owner and why?


Which one appears to be most advantageous for a non-owner employee of a small business and why?

Homework Answers

Answer #1

I would recommend Solo 401(k). This is a solid choice for business owners and their spouses who are able to set aside their part of earnings. It is the best for business owners or self employed person with no employees (except spouse, if applicable)

Simplified Employee Pensions (SEPs) is most advantageous for a non-owner employee of a small business because the employees take responsibility for making investment decisions of their own IRAs. Employer makes contribution to IRAs estabilished by employees.

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