1.) Am I correct in understanding that the annual contribution limit is 25%? If so, does that mean that 18% (my employer's contribution) + 7% (my own contribution) = 25% ? Or is it 25% on my own contributions?
Should I max out my SEP IRA before I focus on anything else?
I agree with the others who say you should NOT buy a house if you are planning to move anytime soon. Max out your retirement plan first and every year hereafter.
A little education: the retirement plan provided by your employer allows for two kinds of contributions - profit sharing and employee deferrals. The first is what your employer contributes (and may be subject to vesting rules); the second is what you can contribute from your salary, usually pre-tax which is GOOD. The 25% rule generally applies to what the employer can contribute as profit sharing (though your
employer is going to contribute 18% it sounds like (that is VERY good!!!). Your salary deferral amount may be as high as $18000 this year (presuming you are under age 50, add $5000 more if 50+). Some employers limit the maximum amount of salary deferral you can make in a year, so ask.
HTH in your understanding...