RATIONAL INVESTING
IN AN
IRRATIONAL WORLD

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THE STRONGEST PRINCIPAL
OF GROWTH
LIES WITHIN HUMAN CHOICE

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RETIREMENT PLAN CONCERNS?
CALL A PAISLEY ADVISOR
AND SLEEP EASY TONIGHT

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Active Strategic Management

  • Wealth Management / Financial Planning

    Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services. Contact a Paisley Financial Associate to learn more about how we can provide for you. 

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  • 401 K Plans

    A 401k retirement plan is a special account funded through pre-tax payroll deductions. Funds in the account can be invested in stocks, bonds, mutual funds or other assets, and are not taxed on any capital gains, dividends, or interest until withdrawn.

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  • IRA Rollovers

    An IRA is an Individual Retirement Account, and provides either a tax-deferred or tax-free way of saving for retirement. There are many varieties of IRA's please read more on the link below to see which is right for you.

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  • Educational Plans

    A 529 plan is a tax-advantaged investment vehicle in the United States designed to encourage saving for the future higher education expenses of a designated beneficiary. Many different plans exist. Learn more to see which is right for you.

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  • Alternative Investments

    Alternative investments are instruments such as physical gold or other commodity based ETF's such as oil or lumber which can be used as a hedge or inflation hedge against an overall portfolio.

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  • Independent Research

    Paisley Financial provides timely and accurate research on markets, companies and industries. Our team offers more than three decades of experience as well as time held relationships with industry experts that will bring the highest quality of knowledge to our customers.

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SEP IRA

Are you a self-employed business owner that is looking for a cost effective plan to lower your taxes and help you save for retirement? If that fits your profile then opening a SEP (Simplified Employee Pension) IRA might be a good retirement account to start for your business.

A SEP IRA is a variation of the Individual Retirement Account used in the United States. SEP IRAs are adopted by business owners to provide retirement benefits for the business owners and their employees. There are no significant administration costs for self-employed person with no employees. If the self-employed person does have employees, all employees must receive the same benefits under an SEP plan. Since SEP accounts are treated as IRAs, funds can be invested the same way as any other IRA.

Just as a traditional IRA or 401k, your contributions are pre-tax and can significantly lower your taxable income.

You contribute pre-tax dollars to a SEP IRA, and that has the effect of lowering your tax bill. The money in the IRA grows tax-deferred, and your business doesn’t pay any taxes on the IRA earnings. The assets can be invested in many ways.

The traditional IRA rules apply. When you take the money out of a SEP IRA for retirement, you pay ordinary income taxes on it. (Should you withdraw SEP IRA assets before age 59½, you’ll likely be assessed a penalty, with some exceptions.)

Employee eligibility conditions are you must be at least 21 years of age, have worked for the employer for at least three of the previous five years, and received at least $500 in compensation for the tax year.

SEP-IRA funds are taxed at ordinary income tax rates when qualified withdrawals are taken after age 59 1/2. Contributions to a SEP plan are deductible; they will lower a taxpayer's income tax liability in the current year.

How Much Can you Contribute to a SEP IRA?

In 2009 and 2010, you can contribute up to 25% of an eligible employee’s compensation, up to a limit of $49,000. No catch-up contributions are permitted for older employees. Based on the 25% rule the income threshold is $196,000. Over an above that you will not be able to contribute any more. That’s when you might want to consider some other business retirement plans. For example, if an employee earns $40,000 in wages, the employer could contribute up to $10,000 to the SEP-IRA account.

The contribution limit for self-employed persons is more complicated; barring limits, it is 18.587045% (approximately 18.6%) of net profit. The computation is in IRS Pub 560, section 5, Table and Worksheets for the Self-Employed, specifically Deduction Worksheet for Self-Employed.

Always talk to a Paisley Financial Advisor before making a determination if a plan is right for you. Laws are constantly changing so make sure you have the most up to date information. We are here to help.

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