A Simple, High-Impact Retirement Solution for Small Business Owners

When it comes to retirement plans for small businesses, the SEP IRA (Simplified Employee Pension Individual Retirement Account) is one of the most straightforward and flexible options available. It’s well-suited for self-employed individuals and small business owners who want a low-maintenance way to save for retirement—without the complexity of a traditional 401(k).

What Is a SEP IRA?

A SEP IRA is a type of retirement plan that allows employers to make tax-deductible contributions to retirement accounts for themselves and their employees. It’s designed to be simple to establish and administer, with minimal paperwork and, generally, no annual filing requirements for the employer.

SEP IRA Key Features:

• Employer-funded only: Only the employer contributes—employees do not make contributions.
• Flexible contributions: Employers can decide how much to contribute each year (up to 25% of compensation, with a cap of $70,000 in 2025).
• Tax advantages: Contributions are tax-deductible for the business, and funds grow tax-deferred until withdrawal.
• Easy setup – Just One Form:  In  most cases, IRS Form 5305-SEP is the only form needed to establish a SEP IRA plan.

Who Is a Good Fit for a SEP IRA?

SEP IRAs can be ideal for:

• Self-employed individuals (freelancers, consultants, independent contractors)
• Sole proprietors or single-member LLCs
• Small businesses with few or no employees
• Businesses with variable income that want the flexibility to adjust contributions year to year

Remember, since contributions must be made equally for all eligible employees (as a percentage of salary), SEP IRAs are usually best suited for businesses where the owner is the only employee—or where the owner wants to contribute generously to all staff.

SEP IRA Resources

Need help getting started? Take a look at the various tools and materials to make it easier to talk about retirement plans and support small business clients with confidence.

SEP IRA: Simple, flexible, and ideal for self-employed individuals or very small teams.

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