Yes, I'll do my best to recap these three retirement plans.
1) An IRA is an Individual Retirement Account. The other two are accounts that are sponsored by a business.
- The maximum contribution for all your IRAs (Traditional and Roth) combined is:
- if you're under age 50. $6,500 (for 2023) and $7,000 (for 2024)
- if you're age 50 or older. $7,500 (for 2023) and $8,000 (for 2024)
- These contributions may be limited is you have a retirement plan at work.
- To determine the amount you can deduct for your IRA, including if you have a retirement plan at work, you can calculate it with the following guidelines.
2) A SEP is a Simplified Employee Pension.
- A SEP is a retirement savings plan established by an employer for their employees and themselves.
- It can also be established by self-employed individuals.
- Employers can make tax-deductible contributions on behalf of eligible employees to their SEP IRAs.
- The SEP IRA contribution limit for 2023 is
- 25% of eligible employee compensation, up to $66,000.
- The maximum compensation that can be considered for contributions in 2023 is $330,000.
- You can see more on the IRS publication Simplified Employee Pension Plan (SEP)
3) A Simple plan to the Simple method to contribute toward employees' and their own retirement savings.
- The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed
- $15,500 in 2023
- $16,000 in 2024
- SIMPLE IRA rules: Contributions and limits
- The company will make a non-elective contribution of at least 2 percent of compensation for all eligible employees earning at least $5,000.
- Maximum compensation is $345,000 for the 2024 tax year.
- Make a matching contribution of 100 percent up to the first 3 percent of compensation.
- You can see more on the IRS publication SIMPLE IRA Contribution Limits
I hope this is enough to get you started.
Please contact us again with any additional questions.