The TD Ameritrade SEP IRA allows sole proprietors to make tax-deferred contributions toward your retirement while reducing your tax liability on your business income.
There is no minimum initial deposit required to open a TD Ameritrade SEP IRA, and there are no maintenance fees for retirement accounts.
Plus, you can earn up to a $600 TD Ameritrade IRA Account Bonus when you open a new IRA today.
Is a TD Ameritrade SEP IRA Right For You?
The TD Ameritrade SEP IRA is a good option if you want to actively invest your retirement savings, because you’ll get access to the TD Ameritrade trading platform and various investment options.
However, SEP IRAs work like Traditional IRAs where you make contributions on a pretax basis and it grows tax-deferred, but you are then taxed at your ordinary income tax rate when you withdraw your money.
For that reason, the SEP IRA is really a better option if you want to reduce your business income tax liability, but it is not for those who want to actively invest and earn tax-free income on investments over the long-term.
The Individual 401(k) is another investment option for sole proprietors that comes in both a Traditional and Roth version, and the Roth version would allow you to contribute after-tax dollars, so that your money grows tax-free, which makes for a better option if you plan to actively invest your retirement savings.
If you want an SEP IRA to reduce your tax liability, but you are not interested in actively investing your money, then you should consider an Ally Bank SEP IRA CD or Savings Account for a fully FDIC-insured SEP IRA option.
More About SEP IRAs
A Simplified Employee Pension (SEP) IRA is for self-employed individuals and for use by small companies for qualified employees to receive employer contributions.
You must be a self-employed individual, a sole proprietor, in a partnership, or a small business owner to open an SEP IRA.
There are no specific annual funding requirements, so you can make flexible contributions on a yearly basis, or you can contribute nothing in any given year if you like.
An SEP IRA must be established and funded prior to your tax return due date, plus any extension, while an Individual 401(k) must be established and funded by December 31st.
Review these other Investment Account Options as well for more retirement promotions.
Consider a TD Ameritrade SEP IRA to reduce your tax liability and actively invest your retirement savings.