I have been working as an independent contractor and I receive a 1099 at the end of the year. My tax consultant has asked me to open a SEP IRA. Now Iam trying to find a best place to open a SEP IRA. The 2 places that come to my mind are fedility and Vanguard. None of them charge anything for the account maintenance. I would like somebody to comment on which one is the best of the two i.e. who has the best fund investment options with low rates. Are there other choices? Any help is greatly appreciated.
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posted: Mar. 15, 2009 @ 5:15p
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posted: Mar. 15, 2009 @ 8:04p
Unless you have a separate job that has a 401(k) (and maybe even if you do), you're better off opening a 401(k) than a SEP.
The choice between Vanguard and Fidelity mostly comes down to what you want to invest in.
posted: Mar. 19, 2009 @ 6:30p
I dont have another job. But for self emplyed, SEP IRA is the only option that I thought i had. Can u please elaborate a bit on the "what you want to invest in". Definitely i would like to invest in both stocks and bonds. Iam mostly interested in commisions paid for any changes? Which one would be better between vangaurd and fedility.
posted: Mar. 19, 2009 @ 11:21p
I have a vanguard SEP - what I like about vanguard is the low fees for all their funds and that they let you do about everything online - i do not think i had to ever mail them anything. Most of their funds have 3k minimuns. I actually have a fidelity 403b - i think the fees are a bit higher with fidelity and personally I like vanguards web site better.
posted: Mar. 20, 2009 @ 12:13a
fmdeals said: I dont have another job. But for self emplyed, SEP IRA is the only option that I thought i had.Nope. You can open a 401(k) ("solo 401(k)" since it's just for you). That's going to let you save much more on money. If your self-employment profit (after employer-side self-employment tax) is $40,000, for example, the maximum SEP contribution would be $8000, while with a 401(k), it would be $24,500 (plus another $5500 if you're over 50). Fidelity, for one, offers solo 401(k)'s at no additional cost. At Vanguard, the cost is $20 per year per fund you hold (waived if you have high Vanguard assets). Can u please elaborate a bit on the "what you want to invest in". Definitely i would like to invest in both stocks and bonds. Iam mostly interested in commisions paid for any changes? Which one would be better between vangaurd and fedility.You need to get more specific.
Vanguard offers very good, very cheap mutual funds covering most investment needs; if you buy them at Vanguard, you mostly pay no transaction fees. It's not usually a good place to invest in anything other than Vanguard's own funds.
Fidelity offers a very wide range of funds, most of which are only so-so, but with some very good choices for index funds and a few other things; you avoid transaction fees by buying them at Fidelity. They also are a good brokerage, unlike Vanguard, so they can be a good choice for buying stocks, ETF's or mutual funds from other companies. But you will pay fees on Vanguard funds like everything else.
posted: Apr. 4, 2009 @ 8:11a
I see that Vanguard's contribution limit for IRA accounts is only $5,000 - is that true for SEP as well?
posted: Apr. 4, 2009 @ 8:44a
elguapo1 said: I see that Vanguard's contribution limit for IRA accounts is only $5,000 - is that true for SEP as well?No.
Senior Member - 1K
posted: Apr. 4, 2009 @ 8:47a
SEP and solo 401k contributions (self-employed business)are based on your income, they're not a traditional (personal). I had a SEP last year, Simple many years ago, and a solo for this year so I've used them all. Each one has it's own benefits and will let you put away more (or less) income.
The only downside to a solo 401K is the reporting required once you start getting a lot of money in there. Also Vanguard does not offer conversions from other funds (yet).
Depending on the kind of money you make, go look up Simple IRA, SEP IRA, and Solo/Individual 401k to see what fits you best. If you're supporting yourself full time on this then I imagine a Simple IRA won't be your best choice as that's a good "startup fund" so you can max that out regardless of your income levels, where SEP and Solo are based on a percentage of your income with a cap after that.
Simple IRA: 11,500 SEP IRA: $49,000 Solo 401k: $65,500
But remember the numbers for SEP and Solo are based on a percentage of income earned, Simple you could sock away $11,500 if you only made $11,500.
Senior Member - 1K
posted: Apr. 4, 2009 @ 8:50a
Btw to answer your other question... Vanguard is who I personally use. They consistently offer the lowest fees which was my reason for choosing them. For me.. index funds are index funds, but some fidelity funds cost twice as much (or more). Would you pay twice as much for gas for the same thing right across the street? I wouldn't.
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