These retirement savings plans are tailored for people who are self-employed, partners, or owners of corporations. Simplified Employee Pension Plan (SEP) IRAs allow you to easily provide tax-deferred retirement benefits — much like a traditional IRA — to yourself and your employees.
- There are minimal facilitation and start-up costs.
- Contributions are flexible and do not have to be the same every year.
- Contributions are tax-deductible up to 25 percent of an employee’s compensation.
- Self-employed individuals are considered employees so they can take advantage of these savings plans. However, employer/employee contributions can be complicated, so make sure you consult your tax advisor for clarification.
- All employees must receive the same benefits.
A SEP IRA can be self-directed and earn tax-sheltered income by acquiring alternative assets.