Simplified Employee Pension (SEP) IRA
A Simplified Employee Pension Plan, or SEP IRA, is a type of employer-sponsored retirement savings plan. It is a great way to increase the amount you and your employees save for retirement.
The SEP IRA is a great option if you are a self-employed individual or small business owner. It allows you to take a potential tax deduction equivalent to the contributions made into the SEP IRA each year. This tax deduction is subject to government guidelines.
The rules governing a SEP plan are not as complicated as a 401(k) plan, and have a few similar benefits. Contributions to a SEP IRA are tax deductible, and earnings within the account are tax deferred until withdrawn, just like a 401(k) plan. This means that the investments’ income in these accounts grows without having to be included in your annual taxable income. Only when the funds are withdrawn from the account as a distribution will there be a potential tax liability.
Key Features
- Tax-Deferred
Funds are tax-deferred while in the account, which means that you do not have to pay taxes until the funds or assets are removed from the account.
- Tax Deductions
Contributions to your SEP IRA may be tax deductible by your business, provided you meet certain requirements.
- Employee Retention
Motivates employee retention by providing your team with additional benefits to assist in saving more for retirement.
- Longer Contribution Period
Your employees can continue to receive SEP contributions past age 72, as long as they meet the requirements of the employer’s SEP Plan agreement.
NOTE: Please visit www.irs.gov for a complete breakdown of the rules and regulations concerning SEP plans. Certain restrictions apply regarding prohibited transactions.
It’s easy to get started investing in a SEP plan. Open an account in just a few minutes on our online portal.
Frequently Asked Questions
about SEP IRAs
What are the fees involved with opening a SEP IRA?
Most custodians of traditional assets collect fees and/or commissions based off of the amount of trades or recommendations of investment choices. Provident Trust Group offers a flat-rate annual fee.
View our fee schedule for full, transparent breakdown of our fees.
What are the contribution (COLA) limits?
Our COLA limits document provides a comprehensive overview of how much you can contribute to your SEP IRA.