Business Retirement Accounts

Contact a Branch Office Investment Services

Simplified Employee Pension (SEP)

Plans can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees.

Eligibility Age

Must be 21 year of age and worked for the employer during at least 3 of the immediate preceding 5 years

Income

Required earned income and contributions made by the employer for the employee

Tax Advantages

Funds may grow tax-deferred

Contributions

May be Tax-Deductible. Cannot be higher than either 25% of the total compensation paid out to the employee that year or specific figure that varies based on cost of living estimates, whichever is lower

Distributions

Distributions are taxed per your income bracket at the time of distribution

Early Withdrawal

Unless an exception applies, withdrawals before age 59 ½ may be subject to a 10% penalty.

Required Minimum Distributions (RMDs)

RMDs start at 70½

Maximum Contribution

For 2017, 25% of compensation or $54,000 subject to annual cost of living adjustment for later years.

Contribution Deadline

Generally, April 15 of the following year for any given tax year.

*Different factors can limit your maximum contributions and what can be deducted from your taxable income.

This chart is for informational purposes only and Edgewater Bank is not responsible for any errors and omissions. The information is subject to change without notice and should not be construed as a recommendation or investment advice. Please consult your tax or legal consultant for questions concerning your personal tax or financial situation.

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