SEP - A Simplified Retirement Investment Plan for Self-employed Individuals

A simplified employee pension is a retirement plan made for business owners and self-employed individuals. The employer only is allowed to make the contributions in this plan to all eligible employees. It is the most preferred plan for many business owners because setting up this plan is totally free and the contribution limits are higher than others. The rules for this investment plan are same as the traditional IRA since it is one of the types of it.

Eligibility

The eligibility rules for this SEP plan are very simple. The requirements are, the contributor must be above the age level of 21, must worked for at least 3 years for the employee and received not lesser than 600 dollars of compensation. Any employee satisfies the above three conditions can instantly set up an account with the help of trustee or custodian.

Contributions

The employer is allowed to make contributions to all eligible employees but the trustee decide the contribution amount for each eligible employee. The maximum contribution can be made for an eligible employee cannot exceed 25% of compensation or 56,000 dollars in the year 2019. Previously in the year 2018, it was 55,000 dollars. This plan has an advantage that the employers can skip contribution for all employees in a particular year if the business was down. But, they cannot skip contribution for some employees. If a contribution is made to an employee, the same contribution amount must be made to all other employees including who left the job, died in that year or has more than 70^1/2 age.

How to Receive Contributions?

If an eligible employee participated in their employer’s SEP plan, first they establish a traditional IRA account. Because to deposit the contribution amount in a SEP plan requires a traditional IRA account. You can easily set up a traditional IRA account with the help of trustee or local custodians. Some financial companies requires that the traditional IRA account must be labelled as SEP IRA in order to receive the contributions. Others will directly deposit the SEP contributions in the traditional IRA whether it is labelled as SEP IRA or not.

Withdrawal

The SEP contributions can be withdrawal anytime as per the traditional IRA rules. The basic taxes are applicable for all withdrawals. If you made a withdrawal before the age 59^1/2, a 10% additional taxes are applied with the basic taxes.

What are Tax Liens? How to Make an Investment in It?

Tax Liens are liens imposed on properties which has an unpaid tax debt in it. The Internal Revenue Service (IRS) is a government body who closely monitor the tax details of each and every property. If they found any properties with outstanding tax amounts, they will remind the taxpayer to settle the due within time by sending a series of notices. After the final federal notice, if the tax amounts still be the same, they will put a lien against the property. The IRS and the federal government have the legal rights to place a lien on a property for the unpaid tax amount. Once the lien is placed, the owner must pay the full tax amount with penalties and interest to the investor to get rid of the lien.

Investment in Tax Liens

Tax lien investing is one of the highly profitable investment methods when comparing to other investment methods. If the investor invests in a tax lien property, they will surely get their investment amount back with the additional interest amount. The interest amount for a property will be varying from 8% to 36% and it depends upon the county of the property where it was located.

Tax Lien Certificate

If a property owner fails to pay the tax amount, the IRS will place a lien on that property. After the lien issued, a tax lien certificate is generated with the value of the amount of tax owed by the owner with penalties and interest. The price of the certificate will vary from 100 dollars for small properties to 100,000 dollars for large properties. These certificates are then sent to the auction process. In the auction, the investors will bid their preferred amount for the certificate. The investor who bid the lowest amount for the interest or highest premium for the property will become the winner.

Where to Start the Tax Lien Investment?

First, choose the best property from the lien list. If you are a beginner and going to invest for the first time, it is best to get help from some lien networks. Then contact the county government to know the details of date, time and place of the auction. They will also tell the rules and regulations that you need to follow in an auction if you ask. Attend the auction and bid on your preferred property. If you are the winner in the auction, buy the tax lien certificate for the property. It is important for a tax lien certificate purchaser to do the due-diligence process in a timely manner.

How To Choose The Best Registered Investment Advisor

The significance of having a Registered Investment Advisor aside for financial planning and investment management is unmatchable. You would have heard stories of many rich people going bankrupt nowadays, that’s because they made the mistake of not hiring an Independent Registered Investment Advisor to assist. When you get new wealth, you likely want to do investment or any other means to increase it. Most of the people don’t think they need professional help, as they have little money or know a trusted person who knows about investment. But it is not how it works; investing money in the right process needs knowledge and experience, which we don’t think anybody will have rather than professional like Registered Investment Advisor.

A Registered Investment Advisor (RIA) is a licensed firm or can be a person, who offers financial advice on the investment process and securities. They act as a fiduciary that respects and keep the client’s interest in the first place. That’s why it is better to hire a good Registered Investment Advisor to plan your investment than seeking the help of your family and friends. Here are some factors that you should check before choosing the best Registered Investment Advisor for your financial planning and advice services.

Look for the legal qualifications of your selected RIA firm or person to know about their work and services. And also an RIA should be registered with the Securities and Exchange Commission (SEC) or to the state securities agency. A registered investment advisor would have the right qualification and proper registration papers, which would lead them to give the best investment advice to the client.

An RIA takes fee in the form of hourly based, commission based and percentage based in some cases. But it is always good to hire an RIA, who offers their services in commission based fee. Because, you will pay them only a percentage of the profit from the successful investment plan, that they have recommended to you. In this way, you will be assured that they are offering the best advice and also working for you rather than making money for them.

Another good way to check the RIA service is to through the testimonials, recommendations, and comments of their previous clients in the website and local directories. And even you can check the local complaint registry website to check any complaint on that firm. A good RIA will have a good reputation.

And lastly, speak with the RIA. Make use of free consultation meeting as some of the RIA firm offers. Ask questions about everything you want to know about them, their company and its services to get a clear idea of their work and objectives.

So choosing the best Registered Investment Advisor is must as it can make or break your fortune.