You   have just    made your    first    $5,000 contribution to  your    retirement account. Asuming you   earn   an  11  percent rate   of  return and   make no  additional contributions, what will   your    account be  worth when you   retire in  45  years? What if  you   wait    10  years before contributing?(Does this   suggest an  investment strategy?)

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A:

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Tax Deferred Retirement Benefits

It stands for Simplified Employee Pension Individual Retirement Account. This savings plan is for self-employed persons such as independent contractors, freelancers, entrepreneurs, etc. The tax rules of SEP IRA are the same as traditional IRA. Entrepreneurs can also open SEP IRA accounts for their employees and gain a tax advantage. The employees cannot make contributions to these accounts by themselves however they will be taxed upon withdrawal.