Do the math:
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Begin a diversified retirement plan:
- SEP-IRA: A good choice for one-employee companies, because you must fund the plan for all employees. Its works like a traditional IRA, but in 2018 you can contribute up to 25 percent of total compensation or $55,000, whichever is less.
- SIMPLE IRA: A plan for owners of companies with up to 100 employees. You and your employees make pre-tax contributions directly from your paycheck. The 2018 contribution limit is $12,500, or $15,500 if you’re 50 or older.
- Solo 401(k): Good for self-employed. You can contribute up to 25 percent of your compensation, plus up to $18,500 ($24,500 if 50 or older) in employee contributions, for a total maximum up to $54,000 in 2018.
- SIMPLE 401(k): For business with 100 or fewer employees. You and your employees can contribute up to $18,500 a year. You can borrow from your account and make no-penalty withdrawals under certain circumstancees.
