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No 401(k)? No Problem! 214 For What It's Worth If you are self-employed and can manage to contribute $6,000 annually to your SEP, invest the dollars in a growth mutual fund earning an average of 9 percent. In 25 years, your nest egg could be worth more than $500,000. You would have contributed $150,000 over the 25 years, all of which was deductible to your busi- ness. Not bad! As a self-employed individual, you make your contributions directly to your account and, if you have employees, directly into their accounts. The investing decisions and choices become the respon- sibility of the employee. The employer can decide annually how much you can afford to contribute. If she's having a lousy year and not making the big bucks, she can contribute less than previously or even nothing. The IRS says that whatever contributions are made "must be based on a written allocation formula and must not discriminate in favor of highly compensated employees." Practically speaking, this means that an employer can't contribute less to employees' accounts than she does to her own. For purposes of eligibility, an employee is anyone who is at least 21 years of age, who has performed services for the employer, and who has received at least $450 in compensation (2001 limit). This