SEP-IRA

Definition

A Simplified Employee Pension IRA is a retirement account designed for self-employed individuals and small business owners, allowing contributions of up to 25% of net self-employment income each year. Contributions are tax-deductible and grow tax-deferred until withdrawal, making it one of the simpler high-limit retirement options available. Unlike a Solo 401(k), a SEP-IRA has no employee contribution component and requires proportional contributions for any eligible employees.