Is a Simplified Employee Pension IRA Right For My Business?
Simplified Employee Pension IRAs (SEP-IRAs) offer small businesses and self-employed individuals a flexible retirement savings option. Unlike 401(k)s, SEP-IRAs are easier to administer, making them ideal for cyclical businesses or those with limited resources. Employers can set up these accounts in three simple steps: drafting a written agreement, informing eligible employees, and establishing an IRA with a financial institution.
Funds in a SEP-IRA are intended for long-term growth, with withdrawals permitted only after age 59.5. This structure aligns with traditional retirement planning, providing tax advantages while encouraging disciplined savings. For employers seeking a low-overhead retirement benefit, SEP-IRAs present a compelling alternative to more complex plans.
