Administrator of Self Directed Retirement Plans Will Waive Set-Up Fees for New Self-Directed SEP IRAs until April 15 to Help Encourage Saving for Retirement. The IRS has increased the contribution limits allowed for retirement plans, and changes in tax structures could benefit many business owners and self-employed entrepreneurs who are saving for retirement.
The IRS has increased the contribution limits allowed for retirement plans, and changes in tax structures could benefit many business owners and self-employed entrepreneurs who are saving for retirement. Next Generation Trust Services, LLC, an administrator of self-directed retirement accounts, is reminding them that now is a great time to consider opening a Simplified Employee Pension Plan (SEP).
A SEP plan provides employers and the self–employed with a simplified way to make to contributions toward their own and their employees’ retirement. The expanded contribution limits promote greater retirement savings and the potential for beneficial tax deductions. Contributions are made directly to traditional IRAs (SEP IRAs) set up for employees and owners. A business of any size can establish a SEP.
Jaime Raskulinecz, founder and CEO of Next Generation Trust Services, said that the new tax rates make it an attractive time to open a retirement account as a counter-measure to potential tax increases. She notes that many people make New Year’s resolutions about taking control of their retirement savings that they put off; she encourages people not to put this on hold any longer for several important reasons.
- Tax deductions
“Self-employed and small-business owners who are looking for additional deductions to offset any tax increase will benefit from funding a retirement account, now and in the future,” she said.
The IRS raised the limit of allowed contributions for 2013 which provides additional retirement savings as well as a higher tax deduction. The IRS has widened federal income tax brackets and increased certain exemptions, deductions, and credits. Some itemized deductions are being phased out for high-net-worth individuals. There are also changes to how long-term capital gains and qualified dividends are taxed. Complete details on changes in the tax structure this year are available at http://www.irs.gov.
- Social security insecurity
Raskulinecz said the talk of cutting social security benefits and/or increasing the retirement age to qualify is an important factor to consider.
“Working people today might see their future social security benefits cut as the federal government tries to balance the budget. Therefore, they cannot rely on receiving those benefits the same way their parents did. Making disciplined deposits into an IRA is the best way to ensure you have enough saved for retirement.”
- Employee benefits
Employers who set up simplified employee pension plans provide an attractive benefit for employees (or for themselves, if self-employed) as well as a tax benefit for their companies.
Self-directed retirement accounts—including SEP IRAs, traditional and Roth IRAs, HSAs, 401(k) plans, and Coverdell accounts—allow for a broad array of nontraditional investments that are prohibited from the typical retirement accounts offered through financial institutions. In self-direction, the investors make all their own investment decisions, usually based on assets they know and understand, and might already be investing in outside of their existing retirement plan. More information about self-directed retirement plans is available at Next Generation Trust Services.
As an additional incentive to help small-business owners and self-employed individuals start saving for retirement, Next Generation Trust Services is waiving its set-up fees for SEP accounts opened now through April 15, 2013, the filing deadline for tax returns. Contact Next Generation for details.
“We do not give investment advice but we do provide guidance about retirement plans and self-direction,” said Raskulinecz. “I recommend that anyone—employer or employee—get started as early as possible on saving for retirement. Setting up automatic withdrawals from regular paychecks throughout the year is a great way to enforce saving, since not everyone can make a large lump-sum IRA contribution before the tax deadline.”
Next Generation Trust Services offers free educational seminars and webinars throughout the year to help investors and their trusted advisors learn more about the growing trend toward self-direction as a retirement strategy. The firm’s popular series, Self-Directed 101 and Self-Directed 201 continue monthly on Wednesdays; a full schedule of upcoming events is available at http://NextGenerationTrust.com/events.