Starting a SEP or SIMPLE IRA Plan

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WOMAN: Finding an inexpensive, hassle-free way to plan for retirement -- your own and your employees -- is something many business owners would like to do.

Two types of retirement plans, known as SEP and Simple IRA Plans, are solutions that are tailored for many small businesses.

GRANT: Money put into these plans goes into Individual Retirement Arrangements, IRAs, for each employee.

The employee then makes his or her own decisions about investing those funds.

SEP and Simple Plans allow higher contribution levels than IRAs.

The employer has no responsibility for the investment of the money once it's contributed to the SEP or Simple IRA.

WOMAN: Retirement plans can involve quite a commitment to keeping up with the complex set of rules and regulations.

GRANT: But many of the elements of running a traditional retirement plan like a 401(k) or a defined benefit plan, such as discrimination testing or computing vesting or eligibility service, just aren't a part of SEPs and Simples.

These plans give business owners a valuable benefit to offer employees with relatively low levels of expense and effort -- a win/win situation.

IRS.gov/ep has lots of information about the rules related to IRAs and IRA-funded retirement plans.

WOMAN: We have start-up kits for SEP and Simple IRA plans that will give you information, forms, and promotional material to get going.

GRANT: There's even information on our retirement-plan correction programs, just in case a mistake is made in operating your plan.

WOMAN: This Website will have late-breaking developments in the retirement-plan area.

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