Income from self-employment? Don't forget SEP retirement contributions

It is not unusual for school employees to have a job on the side during the school year or summer break. If this applies to you, don't miss out on an opportunity to save more for your retirement through a Simplified Employee Pension (SEP) plan.

A SEP plan allows you to save part of your self-employed incomeĀ in a Traditional IRA via SEP contributions. What's more, you can do this in addition to your 403(b) and/or regular IRA contributions.

Besides the income from typical self-employment such as tutoring, piano lessons, etc., alimony is also considered income and may make you eligible for a SEP plan. Contributions you make for 2019 cannot exceed the lesser of 25% of your compensation or $56,000. However, unlike regular contributions to a Traditional IRA, you can make contributions under the SEP for yourself even if you are over age 70 1/2. (Participants age 70 1/2 or older must take required minimum distributions.)

If you're a Wisconsin public school employee, your self-employed spouse or other family member may also be eligible to save with us through a SEP IRA. Enrolling is easy with our step-by-step online application or call us at 1-800-279-4030 for assistance. Wisconsin residency required.

Learn more about SEP by visiting irs.gov.

This article is for informational purposes only and not intended to be legal or tax advice. Consult your tax advisor or attorney before taking any action.

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