If you currently contribute to an IRA traditional retirement plan but have a business on the side, you can also contribute to a self-employed retirement plan. As long as you are earning a self-employment income, which consists of a net profit from a schedule C or F on your tax return, you can contribute to an SEP plan as well as an IRA traditional plan.

Working at two jobs may be a challenge but if you are using your own business to help you achieve a more financially secure retirement then investing your self-employment income makes this a worthwhile venture. In today's uncertain economic climate it is important to be innovative and to take advantage of all retirement planning options that are available. While contributing to an IRA traditional plan will certainly reap it's rewards when you retire, it may not be enough to do the things you have always dreamed of doing once you reach retirement age. You must also consider the fact that most of us are living longer and healthier lives and therefore we need to make certain that we will be financially secure for the duration.

 

Running your own business, while providing you with extra income while raising your family, also puts you in the unique position of having that business help build your retirement income. If you dream of traveling or helping your children or grandchildren with their college education or providing for them financially after you are gone then a self-employment plan along with an IRA traditional retirement plan will ensure you reach those goals. The money that you contribute from your own business can easily be setup through the same institutions that your IRA traditional plans are setup with.

 

Since your IRA traditional plan contributions are capped you can take advantage of putting away additional savings into the employer contribution of your self-employment retirement plan. You will be able to set up your plan anytime until you file your taxes, which can include any tax extensions. Once you make your first year contribution you will not be required to put the same dollar amount each year, the amount you can afford to save can change from year to year. If you have employees that have been working for you for three out of the previous five years you can contribute up to 25% of the employees' salaries per year up to a certain total. You must keep in mind that whatever percentage you decide to contribute it must be the same amount for each employee. If you are contributing the full 25% for one of your employees then you must contribute the same percentage for all qualifying employees.

 

There is a lot to consider when planning for your retirement and tax deferred income is of great importance. Take the time now to research IRA traditional retirement plans along with others you may qualify for including self-employment plans. The time you invest now will be well worth the effort when you are able to fulfill those retirement goals you have dreamed of all your working years.