| |
Money Purchase |
SEP IRA |
Profit Sharing |
| Eligibility |
Any self-employed individual, business owner, or individual who earns any self-employed income |
Any self-employed individual, business owner, or individual who earns any self-employed income |
Any self-employed individual, business owner, or individual who earns any self-employed income |
| Plan Advantages |
Easy to set up and maintain |
Contributions are discretionary |
Contributions are fixed |
| Funding Responsibility |
Employer contributions only |
Employer contributions only |
Employer contributions only |
| Annual Contributions |
Up to 25% of compensation, up to a maximum of $40,000 for the 2002 plan year. 1 |
Up to 25% of compensation, up to a maximum of $40,000 for the 2002 plan year. 1 |
Up to 25% of compensation, up to a maximum of $40,000 for the 2002 plan year. 1
Once established the contribution level must be maintained and may only be decreased by a submission to the IRS. |
| Tapping the Assets |
Withdrawals may be taken at any time. They are subject to current federal income taxes and, if the participant is younger than age 59 possibly a 10% penalty. |
Generally, in service withdrawals are not allowed. |
Generally, in service withdrawals are not allowed. |
| Vesting of Contributions |
Immediate |
Determined by the plan |
Determined by the plan |
| Administration |
No employer tax filings |
No non-discrimination testing. Top heavy testing is required. |
Subject to certain funding and other rules. |
