SEP IRA Eligibility
Self-employed individuals, individuals with a freelance/self-employment income and business owners are eligible to establish a SEP IRA. Businesses with more than just a single employee (i.e., self-employed individuals and freelancers) establish further eligibility requirements like age, total income earned and consistency of employment with the company.

SEP IRA Contribution Limits
Employers may contribute 25% of an employee's wages to a SEP IRA, up to the maximum of $46,000 in 2008. Self-employed individuals may contribute roughly 20% of their net profits, up to the same maximum.

SIMPLE IRA Eligibility
Employers who employ less than 100 workers in a given year (even if they work for one day, they count toward the 100!) can establish a SIMPLE IRA, but only if the employer has no other retirement plan in place. Those employees are eligible to contribute to a SIMPLE IRA.

SIMPLE IRA Contribution Limits
An employee age 49 or younger can choose to contribute 100% of his/her salary to a SIMPLE IRA, up to the maximum dollar amount of $10,500 in 2008. Individuals over the age of 50 can contribute a maximum of $13,000. The employer must also contribute and has two options in how it does so:

• The employer can match the employee's contribution, up to a maximum of 3% of the employee's salary.

• The employer can contribute 2% of each participating employee's salary to that employee's SIMPLE IRA.

Pushing Forward
Oh, we're not done with you yet! Ready to figure out which of these IRAs (that you now know oh so well!) is right for you? We'll help you decide! Just click here now.

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