SARSEP Plan

SARSEP Plan

Is your employer eligible for a SARSEP, and does your employer offer a wage deferral SEP (Simplified Employee Pension)? These programs are less common than most employer funded, tax advantaged retirement programs. Therefore, it is often hard for people who take part in SARSEP programs to locate helpful details about the options open to them.

If you wish to use precious metals to protect your retirement savings, or are considering how silver and gold investments may benefit your retirement funds, you are in the correct place. We will examine what an SARSEP plan is, how it compares and differs from other retirement programs, how precious metal investments work, and how your retirement assets can be safeguarded against currency and stock market collapses.

What is a SARSEP Plan

Lots of workers have not heard about SARSEP plans. Starting the tax year and coming into effect on 1st January 1997, SARSEPs were no longer allowed to be set up in conjunction with SIMPLE IRA programs, although current SARSEPs were incorporated into the system and permitted to stay unchanged. Such changes were implemented in accordance with the 1996 Job Protection Act for Small Businesses.

SARSEP, or Salary Reduction Simplified Employee Pension Plans, are retirement vehicles that were only offered to small companies with twenty-five staff members or less. With SARSEPs, staff members have specific SEP IRAs set up in their name, and the account owner and employer can contribute to them.

Overall, SARSEPs are a selection of individual staff member accounts and SEP IRAs, operated in line with SEP IRA regulations.

Contributions are made before tax, via wage reductions, and contributions from employers cannot surpass either twenty-five percent of the staff member’s annual wage, or $53,000 – whichever is smallest. Contributions from staff members depend on wage reduction contracts outlined in the program. However, these contributions can not surpass $18,000 (for 2015). Furthermore, all contributions are restricted by net profits, which can not surpass 18.6 percent in 2014 – the same as self employed SEP IRAs.

Plan Type Sponsorship 2015 Contribution Limit Roth Option? Allow Gold Stocks? Allow Gold ETFs? Allow Gold Bullion
401(k) Private Employer $18,000 / $24,000 Yes Maybe Maybe No
Solo 401(k) Self-employed $18,000 / $24,000 Yes Yes Yes Yes
Keogh Plan Self-employed or Unincorporated Employer $53,000 No Maybe Maybe No
403(b) Government or Non-profit Employer $18,000 / $24,000 Yes Maybe Maybe No
457(b) Government or Tax-exempt Employer $18,000 / $24,000 Yes Maybe Maybe No
Simple IRA Private Employer $12,500 / $15,000 Yes Yes Yes Maybe
SEP IRA Business Owners & Self-employed $53,000 Yes Yes Yes Maybe
Profit Sharing Plan Private Employer $53,000 No Maybe No No
Money Purchase Plan Private Employer $53,000 No Maybe Maybe No
Annuity Individual None No Maybe Maybe No
ESOP Private Employer Varies Yes Maybe No No
SARSEP Private Employer $53,000 No Yes Yes Maybe
Self Directed IRA Individual $5,500 / $6,500 Yes Yes Yes Yes
Traditional IRA Individual $5,500 / $6,500 Yes Yes Yes No
Precious Metals IRA Individual $5,500 / $6,500 Yes Yes Yes Yes
Thrift Savings Plan (TSP) Government or Military $53,000 No No No No

Limitations and Rules for SARSEP Rollovers

The Internal Revenue Service (IRS) allows transfers or rollovers from SARSEPs (i.e. the specific SEP IRA inside an SARSEP) to be performed tax free, providing the cash is sent to a different certified account. The sole condition is that each program (i.e. the receiving program and the SEP) has to permit account rollovers on retirement savings.

In the event that you wish to carry out a rollover on your SEP, you could opt to transfer the whole account balance, or just some of your account funds. You can be fined for receiving cash distributions before you reach the age of fifty-nine years, six months. Moreover, if you want to try a rollover, you should go for a direct rollover, rather than trying to do it indirectly. With indirect rollovers, you may be fined for breaking early distribution rules, due to the withholding demands.

Kinds of Gold That SARSEPs Allow you to Purchase

Your investment options with SARSEPs are confined to your written employer contract, and what is offered to you by your SEP IRA custodian. By law though, your SARSEP IRA can provide the investment types listed below:
• Options
• Individual stocks
• Mutual fund shares
• Precious Metal
• Individual corporate and government bonds
• CDs
• Real Estate
• ETF shares

As far as tax advantaged investments go, SEP IRAs offer a fascinating selection of options. They permit every investment that a normal IRA permits (and have the same restrictions governed by your custodian). In addition, numerous SEPs also permit account holders to purchase commodities like precious metals.

In light of this, SARSEPs, via individual SEP IRAs, are a rare method of holding real precious metals in investment accounts. Naturally, SEPs can purchase ‘paper gold’ by investing in gold mining firm stocks. Also, they can invest in mutual funds, which hold stocks from mining firms, or exchange traded funds that feature mining firms. This is a way of indirectly investing in precious metal.

Comparing ‘Paper Gold’ Investments With Physical Gold Investments

Firms that look for, mine and produce gold ore provide ‘paper gold’ stocks. The biggest firms are shown on gold indices, such as the HUI and the GDX.

It is very important to choose the right gold custodian company to help guide you as you buy gold and store gold. We list on this site reviews of gold companies so you can compare and choose a reputable company. We, of course, have our recommendation of Regal Assets which is a company with a proven track record and no complaints against them. However you must investigate gold companies on your own to make sure you are picking the proper one for you.

Rank Company BBB
(Rating A+ to F)
BCA
(Rating AAA to F)
TrustLink Storage & Admin Fees
#1 Regal Assets Review
http://buygoldregal.org
A+
0 Complaints
AAA
0 Complaints
(587 reviews) $250 per year
flat-rate
#2 Capital Gold Group Review
www.startwithgold.com
A+
1 Complaint
AAA
10 complaints
(142 reviews) $250 per year
flat-rate
#3 American Bullion Review
www.americanbullion.com
A
4 Complaints
A
9 complaints
(26 reviews) $160 per year
flat-rate
#4 Lear Capital Review
www.learcapital.com
A
26 Complaints
AAA
37 complaints
(228 reviews) $250 per year
flat-rate
#5 Rosland Capital Review
www.roslandcapital.com
A
7 Complaints
AAA
7 Complaints
(21 reviews) $225 per year
flat-rate

 

 

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