An individual retirement account (traditional IRA) is a tax-deferred investment account that allows account holders to contribute up to $6,000 per year pretax as a way to save for retirement. Account holders can invest to grow their IRA without paying any taxes on contributions or gains until money is withdrawn from the account during retirement. A…
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SEP IRA vs SIMPLE IRA: How to Choose the Right Plan 2018
Business owners comparing a SEP IRA vs SIMPLE IRA will find that each has unique benefits and works better in certain circumstances. SEPs have higher contribution limits ($56,000) but require employers to fund all employee contributions. SIMPLE IRAs allow employee deferrals up to $13,000 and require employers to match 1% – 3% of compensation. 401(k)…
Top 26 Ways to Manage Your 401K Investments From the Pros
A 401k investment is essential if you want to achieve a comfortable and financially stable retirement. There are many different ways to manage your 401k investments to ensure you get the most benefits out of your retirement plan. We spoke with the experts who shared their best tips for managing your 401k plan. Here are…
Free SEP IRA Calculator
How to Read Your SEP IRA Calculator Results Suggested Employer SEP IRA Contribution: Your suggested contribution should be the same as the desired amount that you input unless your desired contribution exceeds 25 percent of income or $55,000. If your income is too low, your desired contribution may be too high. If your suggested contribution…
Keogh Plan: Contribution Limits, Rules & Deadlines
A Keogh plan is a qualified retirement plan that allows self-employed individuals up to $56,000 per year in tax-deductible contributions. Keogh plans have largely been replaced by alternatives, including SEP IRAs and Solo 401(k)s, because tax laws now allow business owners who used to use Keoghs to use other plans instead. Spark 401K individual 401(k)…
IRS Form 5500 Instructions [+ Free Checklist]
IRS Form 5500 is a form many employers must file annually to provide information on their employer-sponsored retirement plans. 401(k) plan sponsors often use third-party administrators for plan compliance issues including filing Form 5500 while some handle it themselves. It’s important that accurate filings be submitted on time to avoid penalties or plan disqualification. If…
Free SIMPLE IRA Calculator & Contribution Limits
How to Read Your SIMPLE IRA Calculator Results Some rules of thumb for reading the SIMPLE IRA contribution calculator results include: Annual SIMPLE IRA Contributions: SIMPLE IRA contributions should be at least 3 percent of annual compensation or $5,000. If they’re more than $20,000, or 8 percent to 10 percent of your employee income, it…
Backdoor Roth IRA Conversion: What It Is & When To Use It
A backdoor Roth individual retirement account (IRA) is an account that’s established by converting a traditional IRA or other tax-deferred account into a Roth IRA. Using a backdoor Roth IRA conversion, account holders who aren’t typically Roth IRA-eligible because of income limits can still contribute to a Roth IRA, which then grows tax-free and can…
Fiduciary Financial Advisor: What It Is, Duties & Obligations
A fiduciary financial advisor is an investment professional who is licensed with the United States Securities and Exchange Commission (SEC) or state regulators. Fiduciary advisors are important for clients because they are legally required to put clients’ interests ahead of their own. Using a fiduciary is important if you want an advisor to manage your…
Top 25 Financial Goals from the Pros
It takes strategic planning and proper goal setting to keep your finances in shape. Being able to identify the right financial goals is essential to attain financial security. We spoke with the experts who shared the most important long-term and short-term financial goals that everyone should prioritize to achieve a financially healthy lifestyle. Below are…
Employee Stock Purchase Plan: How ESPPs Work & Who They’re Right For
An employee stock purchase plan (ESPP) is a benefit plan, like a Roth 401(k), that allows employees to make after-tax deferral contributions that can be used to purchase shares in the company they work for. Using an ESPP, employees can typically buy shares at a discount that they can hold until retirement or sell. How…
Employee Stock Ownership Plan: How ESOPs Work & Who They’re Right For
An employee stock ownership plan (ESOP) is a qualified defined-contribution employee benefit plan that provides the employees of a business an ownership interest in that business. An ESOP is used by employers to either reward employees or as an exit strategy from business ownership. If owned by an ESOP, the business can receive great tax…
