Do you work for yourself? Is your business too small for a 401(k) plan?

If so, you should really consider establishing a SEP IRA plan – for yourself and for your employees.

SEP stands for Simplified Employee Pension, and simplicity is a key feature of these retirement plans. You can start a SEP IRA plan with just one IRS form. The paperwork is light – minimal compared to many other types of small business retirement programs. When the plan is in place, you and each of your employees have a SEP IRA.1

SEP IRAs are just like regular traditional IRAs, but with two major differences.

*Yearly contribution limits are much higher. As a solopreneur or small business owner, you can put up to $55,000 a year or just under 20% of your gross income into a SEP IRA (whichever is smaller).

*All contributions to a SEP IRA have to come from the employer. You can contribute as much as 25% of an employee’s salary into an employee’s SEP IRA each year (up to a reasonable dollar limit set by federal tax law).1,2

If you are a sole proprietor behind on saving for retirement, a SEP IRA could really be a great idea. Imagine being able to save nearly a fifth of your gross income each year and giving that money a chance to grow and compound in a tax-favored investment account. If you have employees, they will appreciate the contributions you make to their accounts – and those contributions are largely deductible. Annual contributions to employee SEP IRAs are voluntary – if your business has a lean year, you can pause them and resume them in the following year.

1 – [10/25/17]
2 – [10/25/17]