Does your firm use a SEP IRA for retirement options? Alternatively, are you an entrepreneur who has chosen to adopt a SEP IRA into your organization? SEP IRAs are potent and efficient retirement resources, but can you use them to spread the risk of your retirement assets, by purchasing physical silver and gold bullion?

Let’s take a closer look at SEP IRAs, and see how they measure up to alternative retirement strategies. Also, we will examine how investments in precious metals work, and how your retirement assets can be protected against currency or stock market collapses.

What is an SEP IRA

The IRS (Internal Revenue Service) permits entrepreneurs to use SEP (Simplified Employee Pension) IRA programs in both their staff and their own retirement funds. A hybrid of conventional IRAs, SEP IRAs enable tax deductible money to be paid into staff accounts or employer accounts, with far greater limits compared to conventional IRAs.

All individual staff members have a separate annuity or an IRA set up under their name. Such accounts are used like standard IRAs and offer the identical investment choices as conventional IRA strategies. To be eligible for a staff member SEP IRA, a person has to be twenty-one years of age or older. Also, they have to have been employed by the same firm for a minimum of three years, from the previous half decade, and have received a minimum of $550.00 in wages throughout the tax year.

With SEP IRAs, normal limits for contribution are either twenty-five percent of a staff member’s income, or $52,000.00 (for 2014) — whichever is smaller. For entrepreneurs though, there’s a limit for contributions based on a net profit percentage (18.6 percent for 2014).

However, after the money is deposited, the assets serve like a conventional IRA, and possess all the identical rules regarding distribution, investment and deduction etc.

One huge benefit of SEP IRA programs (compared to other company sponsored programs) is that the money instantly become one-hundred percent vested.

SEP IRA Rules for Rollovers and Restrictions

The IRS allows rollovers or transfers from SEP IRAs to occur tax free, providing the funds are moved to a different certified account. The sole condition is that each plan (the receiving plan and the SEP) should allow for account rollovers for retirement savings. If you’ve got an SEP and want to carry out a rollover, it is possible to transfer the whole balance of your account, or just a segment of your account.

Penalties are enforced, if you take cash distributions before reaching retirement age (59.5 years). Furthermore, if you want to perform a rollover, you are advised to do a direct rollover, rather than an indirect one. Indirect rollovers come with withholding demands, and often incur early distribution fees.

Plan Type Sponsorship 2018 Contribution Limit Roth Option? Allow Gold Stocks? Allow Gold ETFs? Allow Gold Bullion
401(k) Private Employer $18,500 / $55,000 Yes Maybe Maybe No
Solo 401(k) Self-employed $18,500 / $55,000 Yes Yes Yes Yes
Keogh Plan Self-employed or Unincorporated Employer $55,000 No Maybe Maybe No
403(b) Government or Non-profit Employer $18,500 / $55,000 Yes Maybe Maybe No
457(b) Government or Tax-exempt Employer $18,500 / $55,000 Yes Maybe Maybe No
Simple IRA Private Employer $12,500 / $55,000 Yes Yes Yes Maybe
SEP IRA Business Owners & Self-employed $55,000 Yes Yes Yes Maybe
Profit Sharing Plan Private Employer $55,000 No Maybe No No
Money Purchase Plan Private Employer $55,000 No Maybe Maybe No
Annuity Individual None No Maybe Maybe No
ESOP Private Employer Varies Yes Maybe No No
SARSEP Private Employer $55,000 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 $5,500 No No No No

SEP IRA and Gold — What You Can Invest In

When it comes to a SEP IRA, your choice of investments is restricted to your custodian’s discretion. By law though, SEP IRAs can provide the following investment types:

  • Individual bonds (government and corporate)

  • Individual stock

  • Mutual fund shares

  • Options

  • CDs (Certificates of Deposit)

  • ETF (Exchange Traded Funds) shares

  • Precious metals

  • Property

SEP IRAs offer an intriguing selection of investments in the tax efficient world. As well as allowing all the identical investments of a conventional IRA (along with the identical custodian dependent limitations), several SEPs even permit investments of bullion, or other types of commodities. In these situations, SEPs offer one of the few methods to store real silver, gold, palladium or platinum in a savings account.

Obviously, SEPs can be used for investments in “paper gold”, via the purchase of gold mining firm stocks, or via mutual funds (which hold the stocks of mining firms) or ETFs, which includes mining firms. This is how to make gold investments indirectly.

“Paper Gold” Versus Physical Gold Investments

“Paper gold” stocks are offered by companies that mine, create and search for gold bullion. There are a huge number of gold stocks available, and the bigger firms are displayed on the main gold indices, such as the GDX (Gold Miners Index) or the HUI (BUGS Index).

Typically, buying physical gold presents less of a risk than investing in gold stocks. This is due to the fact that, in the past, gold stocks appreciated rapidly, as gold spot prices increased. When gold prices fall, gold stocks usually fall far quicker. Moreover, gold stocks are vulnerable to other risks, such as:

  • Regulatory Risks — Exploration and mining firms are subject to more taxes and regulation.

  • Production Cost Risks — Increasing land values, the depreciation of mining equipment, increases in the cost of labor, etc can all reduce the value of a mining firm.

  • Management Risks — Badly managed, or overly leveraged firms can, and often do, become bankrupt, or shut up shop completely.

Selecting a Gold IRA Company over a Traditional IRA Rollover

On this site we have reviews of gold companies for you to investigate. Because this website that is independently owned, we don’t work for nor do we own any shares in, any gold IRA companies. We are however compensated by some of the companies we recommend. That being said, we do conduct totally impartial reviews based on ratings and reports from reputable online sources and the BBB, BCA and Trustlink.

Rank Company BBB
(Rating A+ to F)
(Rating AAA to F)
TrustLink Storage & Admin Fees
#1 Regal Assets
0 Complaints
0 Complaints
(587 reviews) $250 per year
#2 Capital Gold Group
1 Complaint
10 complaints
(142 reviews) $250 per year
#3 Rosland Capital
7 Complaints
7 Complaints
(21 reviews) $225 per year
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