SEP IRA

Retirement for the independently minded

Have more control with a SEP retirement account

A Simplified Employee Pension, or SEP, retirement account lets self-employed individuals and small business owners make tax-deductible contributions to a traditional IRA to grow their retirement savings.

Free if you're eligible

There are no fees to create or manage a SEP IRA if you meet eligibility criteria.

Get tax breaks

Individual contributions are tax-deductible as a business expense.

Save what you can

SEP IRA contribution limits are higher and more flexible than other IRAs.

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SEP Account Eligibility

Retirement plans for business owners

A SEP retirement account is best for business owners with a few or no employees. You must meet one of the criteria listed in order to qualify for a SEP IRA account.

  • You're the sole proprietor of a business
  • You're a business owner in a partnership
  • You're an individual earning self-employment income

SEP IRA contributions

Contributions can vary from year to year

Your annual SEP IRA contributions can't exceed 25% of compensation, up to $70,000.

Employer contributions

As an employer, you must make your contributions by the business tax filing deadline each year.

Equal contributions

When providing a match to your SEP IRA account, you must contribute the same percentage to all eligible employees.

SEP IRA withdrawals

Minimum required distributions

If you're over age 73, you're required to take a distribution from your SEP account.

Withdraw without penalty

If you're 59 1/2, all withdrawals are permitted penalty-free but will be subject to income taxes.

Penalty for early disbursements

If you make any withdrawals before age 59 1/2 from your SEP IRA account, there's a 10% penalty fee in addition to income taxes.

SEP Retirement Account FAQ
People often ask us

A Simplified Employee Pension, or SEP, IRA is a retirement plan catered toward self-employed individuals and small business owners. It allows employers—including sole proprietors and partnerships—to contribute money to retirement accounts for themselves and their employees.

A SEP IRA is designed specifically for employers and allows for higher annual contribution limits than a traditional 401(k). While both offer tax-deferred growth, only employers can contribute to a SEP IRA for themselves and employees, whereas both employers and individuals can make their own contributions to a traditional 401(k).

Yes. You can contribute to both a 401(k) and a SEP IRA in the same year if you're eligible. However, total contributions must stay within IRS limits, and rules may vary depending on whether you're considered an employee or are self-employed.

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