You can even invest in both as well as a 401 k.
Can i open a sep ira and a roth ira.
You can use your self employment income to fund the sep ira.
You can set aside as much as 25 of your employees compensation footnote 1 up to 57 000 in 2020 56 000 for 2019 to the sep for all eligible employees.
If any of your children have earned income you can open a custodial roth ira for that child.
The contributions will be eligible if your child has a part time job or earns money from babysitting.
As long as you re eligible to invest in either one no rule states you can t open both a roth ira and a sep ira.
Currently you can contribute up to 25 of your salary or 25 of your net business.
Sep iras however come with much higher annual contribution limits than traditional iras and roth iras.
With a traditional or a roth ira an individual s contributions are generally limited to 6 000 a year in 2019 and 2020 or 7 000 for those age 50 and older.
So let s say you have a regular 9 to 5 that sponsors a 401 k plan but you also run a side business.
Because a sep ira is a traditional ira you may be able to make regular annual ira contributions to this ira rather than opening a separate ira account.