Who Can Open a SEP IRA?

(This page may contain affiliate links and we may earn fees from qualifying purchases at no additional cost to you. See our Disclosure for more info.)

A good part of the working population in the United States has some type of retirement plan investment account.

Most individuals contribute to either an employer-sponsored retirement plan like a 401(k) account or a Traditional Individual Retirement Account, known by the IRA acronym.

People who may not be permitted to participate in these retirement savings options are self-employed workers and small business owners with few to no employees.

To provide self-employed Americans with access to retirement savings accounts, the federal government, through the Internal Revenue Service (IRS), offers small business owners some retirement savings options of their own.

One such plan we’ll explore in this article is the Simplified Employee Pension Individual Retirement Account (SEP-IRA).

What is a SEP-IRA?

Essentially, a SEP-IRA plan functions much like a Traditional IRA, allowing you to save for the future in a tax-advantaged way.

The only differences between these two retirement savings options are who can participate and the amount of money they can contribute to the account.