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Simplified Employee Pensions (SEPs) and SIMPLE Plans

SEP vs. Keogh

How do you decide if you should establish a SEP or a Keogh? You must compare both types of plans and determine which retirement plan best fits your needs. Here is a chart summarizing the key features of SEPs and Keoghs:

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Key Features of SEPs and Keoghs

Features / Provisions	SEP	Keogh
Plan document	One-page form can be used: IRS Form 5305-SEP	Full plan document
Maximum contribution Maximum employer deduction	Lesser of $57,000 in 2020 ($56,000in 2019) or 100% of compensation per employee. 25% of total eligible compensation of employees covered by the plan.
Loan provisions	Cannot borrow against SEP account	Able to borrow against Keogh account
Eligibility	Less restrictive rules for employee eligibility	More restrictive rules for employee eligibility
When to establish	Have until due date of tax return to establish	Must be established by December 31
Annual reporting requirements	None	Annual reporting requirement on Form 5500

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Member FINRA / SIPC. Osaic and Friend Bank are not affiliated. Products and services made available through Osaic are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

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