2011 SEP IRA Contribution Limits and the 403b

You're Visiting Retire2Enjoy.com

The 2011 SEP contribution limits have been set for those who are self-employed or work in a business of fewer than 25 employees. Those who work for an educational institution or a non-profit organization, make a 403b contribution.

SEP and 403b

The self-employed and workers in businesses with fewer than twenty-five employees should make a SEP contribution while employees of public schools, non-profit organizations, and educational institutions should make a 403b contribution as if they were investing in a 401k.

2011 SEP IRA Contribution Limits

Here are the are the 2011 SEP IRA contribution limits. Employers can contribute up to 25% of net self-employment income or up to 25% of employees’ compensation capped at $49,000. The maximum compensation considered in the equation is $245,000. Those

What the Acronyms Mean

Simplified Employee Pensions (SEP)—an IRA for the self-employed and workers in businesses with fewer than twenty-five employees
KEOGH—similar to the SEP except more complicated
403b—available to employees of public schools, non-profit organizations, and educational institutions
457—for employees of state and local governments and tax-exempt organizations
The Federal Employees Retirement System (FERS)—a 401k-type for Federal workers

The Federal Government

Even the Federal Government is walking away from defined benefits, as evinced by FERS. The older Civil Service Retirement System had worked like a traditional pension, but in 1987, the U.S. Office of Personnel Management implemented FERS as a defined contribution retirement plan for new hires.

Topic: The 401k