Financial Jargon

Financial Jargon

We understand, financial jargon can be confusing. Don’t worry! We’ve gathered a glossary of frequently used terms to make your journey to retirement that much easier. 12b-1 fee A fee that is paid out of a mutual fund’s assets to cover marketing and distribution costs of the fund or to pay commissions to brokers. The …

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Retirement Planning Basics

Getting Close to Retirement? Things to Think About.

Getting close to retirement? Tips to help make sure you’re on track. Once you’ve built a retirement nest egg, you’ll need a strategy for use your savings in retirement. Here are some things to keep in mind. Choose investments that fit your stage of life As you move towards retirement and have less time to recover …

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Retirement Planning Basics

What to do with Your 401k Plan if You’ve Lost Your Job.

It’s stressful to lose your job. It’s additionally stressful to have to decide what to do with your 401(k) during this time. Here’s a few options to help make this decision easier. If you’re fired or laid off, it’s your right to move money from your 401(k) account to an IRA (Individual Retirement Account) without …

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Retirement Planning Basics

Make Sure You Know What Fees You are Paying

High fees can eat away your retirement savings, make sure you know what you’re paying. Many people don’t know how much they are paying for their retirement saving plan. Unfortunately, it’s all too common that people are paying high fees. Make sure you know what you’re paying, this will help make sure you’re on track …

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Retirement Planning Basics

Five Ways to Reach Your Retirement Savings Goal

Successful investing will help you reach your retirement savings goals. To do this, you’ll need to assess your goals, review your options, and routinely check on your investments. The following tips will help you. Start today. The sooner you begin investing in your retirement plan, the more time you benefit from years of compounding growth. …

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Retirement Planning Basics

Employer Match, a Great Benefit

Always take advantage of an employer-offered 401(k) match. It’s rare to receive free money, but that’s what a 401(k) match from an employer is. A “match” is when an employer contributes money to your 401(k) account when you put money into it from your paycheck. An employer’s match is a percentage of what you contribute …

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Retirement Planning Basics

Emergency Savings, Everyone Needs them Sometimes

An emergency savings account is necessary for your financial well-being. Life’s unexpected surprises often have financial costs. However, with a little planning, an emergency fund can help you to successfully weather these small storms. An emergency plan will also help you to avoid using high-interest credit cards, personal loans, or prematurely withdrawing money from your …

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Retirement Planning Basics

The Benefits of Saving Early

Start small, save early, and let the power of compounding work for you. Simply put, the earlier you begin saving, the better. Regardless of how much money you make, or how far away retirement may seem, it’s never too soon to start saving in a retirement plan. Waiting even a few months, could mean less …

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Types of Plans

SEP-IRAs: Retirement Saving for Self-Employed Individuals

You’ve heard about Individual Retirement
Arrangements (IRAs) as a good way to save
when you don’t have access to a 401(k)-type
plan. But if you’re self-employed, there’s an
even better option — a simplified employee
pension, or SEP-IRA.
A SEP-IRA has much higher contribution
limits than regular IRAs. Plus, they are
easy to set up. Any size business can open
a SEP-IRA. Only the employer can make
contributions on behalf of employees. So,
if you’re self-employed and you’re the only
employee of your business, you’ll make
contributions to the plan on your own
behalf…

You’ve heard about Individual Retirement
Arrangements (IRAs) as a good way to save
when you don’t have access to a 401(k)-type
plan. But if you’re self-employed, there’s an
even better option — a simplified employee
pension, or SEP-IRA.
A SEP-IRA has much higher contribution
limits than regular IRAs. Plus, they are
easy to set up. Any size business can open
a SEP-IRA. Only the employer can make
contributions on behalf of employees. So,
if you’re self-employed and you’re the only
employee of your business, you’ll make
contributions to the plan on your own
behalf.

Here’s what you need to know about
SEP-IRAs.
SEP-IRA Basics
Here are the basics of SEP-IRAs for the selfemployed:
» You can open one with your bank or
other financial institution. The person
you work with will help you fill out a form
for an IRS-approved “prototype SEP plan”
or will help you complete IRS Form 5305-
SEP. You don’t have to file the form with
the IRS. It simply documents that you
established the plan.
» SEP-IRAs follow Traditional IRA rules on
how they are taxed. Your contributions
are tax-deferred until you withdraw them in retirement.

» You can contribute up to 25 percent of
your net earnings or $53,000 for tax year
2015, whichever is less.
» You can choose among investment
options. Typically, banks offer certificates
of deposit (CDs) or money market funds.
Other institutions, such as brokerages,
life insurance companies and credit
unions, offer stocks, bonds, mutual funds
and other options.
» You can roll your SEP-IRA into another
SEP-IRA or Traditional IRA. If you take a
job that includes a 401(k)-type plan, you
can roll your SEP-IRA into the plan, as
long as it accepts rollovers.
» If you hold on to your business and take a
second job that offers a 401(k)-type plan,
you can participate in both.
» You can’t take a loan from your SEPIRA.
If you need access to the money
before you reach age 59½, you can take
a withdrawal, but you’ll typically pay
ordinary income tax and a 10 percent
penalty.
» You can avoid the 10 percent penalty on
your early withdrawal if it’s for certain
reasons. These include:
» College expenses

» First-time home purchase (up to
$10,000)
»Certain medical expenses
» Total and permanent disability
» If you’re a reservist called to active duty
» You inherit an IRA
» You are receiving distribution in the
form of an annuity
» You’ll need to start taking distributions
when you reach age 70½. The financial
institution that holds your account
will notify you when you need to start
making withdrawals.
Take Action!
Q Make a plan for your retirement. Be
specific and set realistic goals to help
make retirement attainable.

Q If you’re self-employed, consider a SEPIRA
for your retirement savings, rather
than a Traditional or Roth IRA. You’ll
benefit from higher contribution limits.
Q You can open one through a bank or
other financial institution.
Q Understand the investment options
available and decide if they are right for
you before opening your account.
Q Since SEP-IRAs follow the rules for
Traditional IRAs, see our related article on IRAs.
Q Learn more about SEP-IRAs by reading

“SEP Plan FAQs” on the IRS website.

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