Despite the lengthy name, Simplified Employee Pension (SEP) IRAs have a reputation for being relatively straightforward and inexpensive plans. Because any type or size of business can have a SEP IRA, check out the simplicity and flexibility it can offer. For example:

• Your annual contributions can exceed the limits of a traditional or Roth IRA. 
• SEPs are the only plans that can be set up after the end of the year if you don't already have a plan. 
• SEPs have low account and administration costs.

Contribution features

• For 2019, you can contribute either 25% of your compensation or $56,000, whichever is less.

• For 2020, you can contribute either 25% of your compensation or $57,000, whichever is less.

• Contributions to SEP plans are tax-deductible and grow tax deferred. 
• Employees who receive contributions are immediately 100% vested.

Deadlines

You must establish and fund your SEP IRA by your business' tax filing deadline, including extensions.

How we can help

The low cost and simplicity of a SEP IRA can be appealing, but how do you know if it's right for you? Ask your financial advisor for more information about all the options available for your plan.