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What is a 'Simplified Employee Pension - SEP (Simplified Employee Pension IRA)'

A simplified employee pension (SEP) is 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.

BREAKING DOWN '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. Who is eligible to obtain a Simplified Employee Pension (SEP) IRA?

    Learn if an individual may contribute to a Simplified Employee Pension IRA when his or her employer offers a plan and how ... Read Answer >>
  2. When are Simplified Employee Pension (SEP) IRA contributions due?

    Read this article to learn more about the April 15 SEP IRA contribution deadline date and how tax-filing extensions affect ... Read Answer >>
  3. Can catch-up contributions be made to a SEP?

    Find out why catch-up contributions are not typically allowed for SEP IRAs. Learn why the terms of your specific plan may ... Read Answer >>
  4. How are Simplified Employee Pension (SEP) IRAs taxed?

    Understand the tax advantages of a Simplified Employee Pension IRA plan, and find out how both the employer and the employee ... Read Answer >>
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