Do you have a SEP-IRA? Do you even know what one is?
Let’s zoom out for a sec for an IRA refresher…
An IRA, or Individual Retirement Arrangement, is an account set up at a financial institution that allows you to save for retirement.
What’s the difference between a SEP-IRA, a Traditional IRA, and a Roth IRA?
To quote Vanguard.com:
A SEP-IRA (Simplified Employee Pension) is a simple, tax-deferred retirement plan for anyone who is self-employed, owns a business, employs others, or earns freelance income. If you’re self-employed, your contributions are generally limited to 20% of your net income. (Net compensation for self-employed individuals is generally the net profit from IRS Schedule C reduced by the deductible self-employment tax. The eligible compensation limit, indexed for inflation by the IRS, is $285,000 for 2020 and $290,000 for 2021.)
Traditional IRA contributions are tax-deductible on both state and federal tax returns for the year you make the contribution; withdrawals in retirement are taxed at ordinary income tax rates.
Roth IRAs provide no tax break for contributions, but earnings and withdrawals are generally tax-free.
While the contribution limit for Traditional and Roth IRA’s is $6,000 ($7,000 if you’re over 50), the SEP-IRA has a much higher limit. It’s great for when you have a good year and have already maxed out your other IRA’s.
To see all the 2021 retirement plan contribution limits, click here.
I set up my SEP-IRA a few weeks ago to reduce how much taxes I’d owe and it made a huge difference. FYI the deadline to contribute for 2020 was April 15th but you have plenty of time to set your SEP-IRA for 2021.
TIP OF THE WEEK
Even if you set up your SEP-IRA and other retirement accounts properly, you can’t just “set it and forget it”. Tax laws change, interests rates change, your age changes, etc. so you need to pay attention.
For example, interest rates have dropped to their lowest levels since the Great Recession of 2008 and will not go back up until at least 2023. My Traditional IRA was earning only 0.01%! I converted it to a managed Index Fund and as of this writing is earning over 4%.
I’m not saying you should do that! Just understand that you need to keep an eye on your portfolio, interest rates, and the news so can make informed decisions.
Learn more about the SEP-IRA and other ways to save for retirement at the IRS website.
NEWS AND NOTES
Monday April 19th – Saturday April 25th: VO Atlanta 2021. It’s here! Here’s what I’m presenting:
SOLD OUT!!! Tuesday, April 20, 2021, 3:15 PM – 6:15 PM: [X-SESSION] Learning to do eLearning
Wednesday, April 21, 2021, 1:00 PM – 1:45 PM: eLearning Panel (moderator)
Thursday, April 22, 2021, 3:15 PM – 6:15 PM: [X-SESSION] eLearning Script Writing & Performance Intensive
Friday, April 23, 2021, 5:00 PM – 5:45 PM: Explainers Explained!
The X-Sessions cap at 12 students so sign up ASAP!
Thursday, April 29th @8PM EST: the VO Mastery workshop, “Direct Marketing”. This 90-minute online workshop is only $59. Email Rachel Wohl at rachel@nullvomastery.com to sign up!
SOLD OUT!!! Friday, April 30th @5PM EST: The Voice Actors Studio webinar “eLearning Performance Workshop“. Learn about the world of eLearning and get some live coaching, too.
HAPPY HAPPYS
Happy Piñata Day and Animal Crackers Day!
QUOTE OF THE WEEK
Tom Dheere is a voice actor with over 20 years of experience narrating just about every type of voiceover you can think of. He also helps other voice talents navigate the voiceover industry as the VO Strategist. When not voicing or talking about voicing, he produces the sci-fi comic book Agent 1.22.
Commenti