Investment Options When You Work From Home
Though many people willingly choose to work from home or are self-employed, a lot of them don’t plan for the future and end up saving close to nothing for their retirements. Financial issues may at the time seem too overpowering, but having some retirement plan is essential for everyone. There any many investment options that are designed specifically for those working from or running small businesses from home to minimize tax burden and growing a fund for retirement.
- SIMPLE IRA
The SIMPLE in SIMPLE IRA stands for ‘Savings Incentive Match Plan for Employees’, while IRA means ‘Individual Retirement Arrangement.' If you have up to 100 employees, you can invest in a plan through this IRA. As an employee, you can contribute up to$13,500 per year, while as an employer, you can match up to 3%of your net earnings from self-employment.A 25% penalty fee is applied if you withdraw from SIMPLE IRA within two years of opening it, so putting money in it ensures that it will be there for the long run.
- Traditional or Roth IRA
Traditional or Roth IRA is considered to be a good start for those looking to invest. Anyone having some form of earnings or income can contribute to this IRA. However, you can only contribute $6,000 per year or $1,000 more if you’re 50 or older. Roth IRAs have a limit, though, so if you earn too much money per year, you cannot contribute to Roth IRAs. As for taxes, with Roth IRA, you cannot avoid taxes before, but you can avoid them after you take it out in retirement. For traditional IRA, you avoid paying taxes on the money you put into it before as well....
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