A Simplified Employee Pension Plan, otherwise known as a SEP IRA, is a retirement plan specifically designed for anyone with self-employment income (for example, self-employed individuals and small business owners). A SEP retirement plan can help you contribute to your retirement savings while reducing your taxable income.
SEP IRAs have a number of advantages over other retirement plans, including:
All contributions made to a SEP IRA are employer contributions. An employee cannot defer a portion of his or her salary and contribute it to a SEP IRA. Employers may contribute up to 25% of an employee's compensation (up to $52,000 per participant in tax year 2014, the highest limit allowed by law).
1 Any withdrawals made prior to age 59 1/2 may be subject to an additional 10% penalty, in addition to ordinary income tax.
2 SEP IRAs for sole proprietorships can only be established though the Investment Solutions IRA. SEP IRAs for partnerships or business owners (S Corps) can be established through the Brokerage Services IRA.
The tax information contained herein is not intended to be used, and cannot be used, by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed herein. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not bank deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY.