Simplified Employee Pension (SEP)

A Simplified Employee Pension plan is an ideal investment for the small business owner and particularly the self-employed.

Contributions to the plan are tax-deductible, and earnings are tax-deferred, so funds will accumulate more quickly. As an employer, you can make contributions for yourself and each eligible employee in any percentage you choose, up to 25% of the first $345,000  of each eligible employee’s compensation or $69,000.

You also remain in complete control over when and how much of a contribution you make. Employees cannot contribute to the plan, and employers are not required to make a contribution every year. You can make a contribution in years when profits are up, and skip years that are leaner. SEP plans are easy to establish and can be opened with as little as $50.