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Stifle Nicoluas

The story with these shoes

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The SEP IRA: An Effective Retirement Tool for SelfEmployed Individuals and Small Business Owners


s you juggle all the day-today responsibilities that come with running your own business and taking care of your family, it’s easy to put off long-term needs like planning for retirement. You may already be familiar with basic retirement planning tools like IRAs, but what other options are available? Getting started on the road to retirement can seem time-consuming and even a bit intimidating, but it doesn’t have to be. A good first step would be to consider one of the most popular options among self-employed individuals like you, the SEP IRA. SEP IRAs combine many of the advantages of more complicated retirement plans with the simplicity of an IRA. They are easy to set up and manage, require no annual government reporting, and generally feature low administrative fees. With a SEP IRA, the employer is responsible for funding the plan through tax-deductible contributions, and when contributing to the plan, contributions must be made for all eligible employees. An eligible employee is defined as anyone who is age 21 or older, performed service for you in three of the last five years and has earned at least $550 from you in the year the contribution is intended. A major advantage of SEP IRAs over traditional IRAs is that SEP IRAs allow for significantly larger contributions. In 2012, the maximum annual contribution is 20 percent for

self-employed individuals or 25 percent of incorporated business employees’ compensation (capped at $250,000), up to a limit of $50,000 per participant. As the employer, you must contribute the same percentage of compensation to all eligible employee accounts that you contribute to your own. Employer contributions are entirely discretionary, meaning that they can vary in amount from year to year. Employers even have the flexibility to not make a contribution in any given year. SEP IRA contributions are tax-deductible for the business and are allowed in addition to traditional IRA or Roth IRA contributions. For some sole proprietors who file single, this may be one of the simplest ways to have a deductible contribution toward their retirement. Adjusted gross income limits and participation in a qualified plan may prevent an individual from qualifying for traditional IRA deductions or making Roth IRA contributions. Please consult your tax advisor for details. While the SEP IRA may work well for you, are there any options available to stay-at-home spouses who want to invest for retirement? Fortunately, yes. A non-working spouse can make a deductable contribution (if he or she qualifies) of up to $5,000 ($6,000 if age 50 or older) to an IRA, provided the couple files a joint tax return and the working spouse has enough earned income to cover the contribution.

Lori Nurge

Note that if the working spouse participates in an employersponsored retirement plan, the deduction of the contribution to the non-working spouse’s IRA may be limited, depending on their joint adjusted gross income. As you decide to start planning for the future, consider enlisting the help of a professional. A financial advisor can help you learn more about the SEP IRA, spousal IRA contributions, and the other retirement planning options available to self-employed individuals. Lori Nurge is a first vice president/investments and branch manager with Stifel, Nicolaus & Company, Incorporated, member SIPC and New York Stock Exchange. She can be reached by calling the firm’s Ketchum office at (208) 622-8720 or toll-free at (877) 635-9531. tws


oanne Wetherell and other members of the RE/MAX of Sun Valley staff served up pink cupcakes, pink sugar cookies, pink lemonade and pink martinis accented with coconut and other Caribbean flavors Friday at their office on Sun Valley Road. The office will be offering more goodies to the public this Friday from noon on as they get Jazzed About Pink to draw attention to the fight against breast cancer. Any donations supporters make will be given to the Susan G. Komen Passionately Pink for the Cure fundraiser to raise money for breast cancer research. Photo: KAREN BOSSICK/SUN

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Laura Zuckerman to Discuss Her Book, Born in Africa at Hailey Public Library As part of the “Let’s Talk About It� adult book club series happening at the Hailey Public Library, awardwinning writer Laura Zuckerman will lead a discussion of Martin Meredith’s “Born in Africa� on Thursday, October 18 at 6 p.m. All are welcome. Meredith’s book, released in 2011, follows the trail of discoveries about human origins made by scientists over the last 100 years, recounting intense rivalry, personal feuds, and fierce controversies. Zuckerman, who lives and works in Salmon, Idaho, states, “Born in Africa: The Quest For the Origins of Human Life,� raises a key question: Can

science solve the mystery of humankind?� The humanity of science and technology is the focus of this year’s “Let’s Talk About It� series, hosted by the library and backed by the Idaho Commission for Libraries. Participants enjoy discussions led by scholars such as Zuckerman, whose writing has been featured in such publications as The New York Times Magazine and Western Art & Architecture. For more information visit HPL online at Thank you to the sponsors: Idaho Humanities Council, with generous support from US Bankcorp.

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Papoose Club News

At the September meeting of The Papoose Club, members voted to give $2,460 to two local children’s organizations. The recipients of the funds were: St. Thomas Playhouse Children’s Theater Tour for their upcoming tour of the play “Stone Soup�. The club granted funds for costs associated with the production of this kid-friendly folk story. Hemingway Elementary’s pilot program of Nurture’s Elementary Nutrition and Wellness Program received a grant for food and supplies for this new pilot program that teaches children about wellness and nutrition. In other news, the club announced their winner of “Member of the Year.� Longtime member Karin Horvath was honored with this accolade for her dedication to the club’s activities and fundraisers. Info: 726-6642

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October 17, 2012  

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