How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask ABC Accounting Group Your Own Question
ABC Accounting Group
ABC Accounting Group, Certified Public Accountant (CPA)
Category: Social Security
Satisfied Customers: 664
Experience:  Business Consultant/Accounting Manager
89981332
Type Your Social Security Question Here...
ABC Accounting Group is online now
A new question is answered every 9 seconds

I am 22 years old self employed and want to know more info

Customer Question

Hello i am 22 years old self employed and want to know more info on retirement and investment I was offered today to get a 401K but I'm not sure how any of that works
Submitted: 10 months ago.
Category: Social Security
Expert:  ABC Accounting Group replied 10 months ago.

Hi. I can help you. There a few plans you can choose from.

Expert:  ABC Accounting Group replied 10 months ago.

Simplified Employee Pension (SEP)

  • Contribute as much as 25% of your net earnings from self employment

Savings Incentive Match Plan for Employees (SIMPLE IRA)

  • You can deposit all of your net earnings in the plan: up to $12,500 in 2015 and 2016, plus either a 2% fixed contribution or a 3% matching contribution.

Keogh Plans - not often used, though:

  • Defined-contribution. These plans have two variations: profit-sharing and money-purchase. The profit-sharing version of the Keogh is most like the SEP; there's a ceiling on contributions - 25% of compensation, up to a maximum contribution of $49,000 in 2010 - and below that limit you can put in whatever you can spare. You also can change your contribution each year. With the money-purchase plan, you pick a percentage of income you'll contribute every year, and stick with it. If you don't, you'll owe the IRS a penalty.

 

  • Defined-benefit. This type of Keogh acts as a traditional pension plan, but for one key fact: you fund it yourself. You pick the annual pension you want, then contribute (and deduct from your taxes) whatever amount is needed to reach that goal. If you're self employed and have a high income - say you're a doctor or lawyer - this type of plan may allow you to save more for retirement than many other plans.
Expert:  ABC Accounting Group replied 10 months ago.

I gave you a link to a website, talking about SEP's.

Expert:  ABC Accounting Group replied 10 months ago.

Let me know if you have any questions.

Expert:  ABC Accounting Group replied 10 months ago.

Have a great day.

Related Social Security Questions