In general, which of the following statements regarding self-employed retirement accounts is true?
A) SEP IRAs have higher contribution limits than individual 401(k)s if the contributing taxpayer is at least 50 years of age at year end.
B) SEP IRAs have higher contribution limits than individual 401(k)s no matter the age of the contributing taxpayer.
C) Individual 401(k)s have higher contribution limits than SEP IRAs.
D) None of these. Both SEP IRAs and individual 401(k)s have exactly the same annual contribution limits.

Question

Quizplus · Accepted Answer

Individual 401(k)s have higher contribution limits than SEP IRAs. As of 2021, the maximum contribution limit for an individual 401(k) is $58,000 ($64,500 if age 50 or older), while the maximum contribution limit for a SEP IRA is $58,000, regardless of age.

In General, Which of the Following Statements Regarding Self-Employed Retirement