Simplified Employee Pension - SEP (Simplified Employee Pension IRA)

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DEFINITION of 'Simplified Employee Pension - SEP (Simplified Employee Pension IRA)'

A retirement plan that an employer or self-employed individuals can establish. The employer is allowed a tax deduction for contributions made to the SEP plan and makes contributions to each eligible employee's SEP IRA on a discretionary basis.

INVESTOPEDIA EXPLAINS 'Simplified Employee Pension - SEP (Simplified Employee Pension IRA)'

Contributions to SEP IRAs are immediately 100% vested, and the IRA owner directs the investments.

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RELATED FAQS
  1. What are the Simplified Employee Pension (SEP) IRA contribution limits?

    A simplified employee pension IRA, called SEP IRA for short, is a retirement plan that allows business owners to contribute ... Read Full Answer >>
  2. What are the main differences between a Simplified Employee Pension (SEP) IRA and ...

    A SEP IRA allows employers a simplified method to contribute toward employees' and their own retirement. A SIMPLE IRA helps ... Read Full Answer >>
  3. What are the main differences between a Simplified Employee Pension (SEP) IRA and ...

    A simplified employee pension IRA is a type of traditional IRA that is designed for self-employed individuals or small business ... Read Full Answer >>
  4. When are Simplified Employee Pension (SEP) IRA contributions due?

    A SEP IRA, also known as a simplified employee pension plan, is an investment vehicle that allows business owners to contribute ... Read Full Answer >>
  5. Is a Simplified Employee Pension (SEP) IRA tax deductible?

    Payments that you make to a Simplified Employee Pension (SEP) IRA are tax deductible. However, there is a maximum limit that ... Read Full Answer >>
  6. Who is eligible to obtain a Simplified Employee Pension (SEP) IRA?

    An individual is eligible for a simplified employee pension individual retirement account (SEP IRA) if his or her employer ... Read Full Answer >>
  7. How do I set up a 408(k) plan in my business?

    To set up a 408(k) retirement plan, you must first ensure that all eligible employees own an individual IRA account. These ... Read Full Answer >>
  8. Is a 408 (k) the same as a Simplified Employee Pension (SEP)?

    A 408 (k) is not the same as a Simplified Employee Pension (SEP). The SEP plan is a retirement plan that allows employers ... Read Full Answer >>
  9. My company has three partners but plans to hire more this year. Would we be better ...

    It depends. The SBO-401(k) plan is suitable if the plan covers only the business owners - in this case, the partners in the ... Read Full Answer >>
  10. Is an employee eligible for an SEP if the plan has already been set up for other ...

    It depends. The employee should meet not only the service requirements, but the age and compensation requirements as well. ... Read Full Answer >>
  11. Can I roll my SEP IRA into a Traditional IRA or should I convert to a Roth?

    Technically, the SEP IRA and the Traditional IRA are the same type of account. The only difference is that the SEP IRA is ... Read Full Answer >>
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