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The Simplified Employee Pension (SEP) is an IRA – based employer plan. Should you decide to adopt a SEP for your business, you will be solely responsible for funding the plan. The level for contribution per each employee is the lesser of 25% of salary or $44,000 (2006). If you are unable to determine your profit margin from year to year, you may find the SEP attractive since contributions are discretionary. This means that you could decide not to make contributions to the plan in the years that funds are not readily available. You should bear in mind that contributions to SEP IRAs are immediately 100% vested, meaning employees may take the contributions at any time, whether or not they still work for your business.
If you need further information on this retirement plan or any of the other services LPL Financial offers please contact your LPL Financial Consultant either by telephone at 888.801.1666 or via our easy inquiry form online.
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