United States
"Simplified Employee Pension (SEP) IRA"

What is a SEP IRA ?

Simplified Employee Pension (SEP) plans can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees. 

How Does the SEP IRA Work ?

Employers may make tax-deductible contributions on behalf of employees to their SEP Plan. Contributions come solely from the employer & they are not required to contribute every year.

Who is Eligible for SEP IRA ?

A SEP IRA is an employer-sponsored retirement plan that can be set up by self-employed individuals, freelancers, and small-business owners.

CHECK REQUIREMENTS

Who Can Participate in SEP IRA ?

Employee is eligible to participate, if he is at least 21 years old and has worked for the company in 3 of the last 5 years & received at least $750 in compensation during the year.

SEP IRA Contribution Limits

You can contribute up to 25% of employee compensation, or $66,000, whichever is less for the year 2023. For SEP IRAs, there is no catch-up contribution after age 50.

SEP IRA Withdrawal Rules

SEP IRA contributions and earnings can be withdrawn at any time. SEP are intended to be withdrawn after age 59½. You can make a withdrawal before that, but you’ll pay a 10% penalty.

Tax Credit on SEP Plan

Business owners who start up a SEP may be eligible for a tax credit of up to $500 per year for the first three years that the SEP account is open.

How to Set Up a SEP IRA ?

CLICK HERE TO set up

You can open one at almost any bank, mutual fund company or brokerage firm. If you have employees, this financial institution will serve as trustee of the SEP IRA.

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