The SEP IRABuilt for small payrolls.
Set up at Schwab, sized each year with your CPA, and managed by the same portfolio managers who run our institutional accounts. The SEP IRA, handled with the same process as the rest of the household plan.
Employer-Funded, Employee-Owned
The simplest qualified retirement plan a business can run.
A SEP IRA is a retirement plan the employer funds and the employee owns. The business decides whether to contribute in a given year, the contribution goes directly into each eligible employee’s IRA, and the employee invests it. There are no payroll deferrals, no annual plan testing, and no Form 5500.
Contributions are flexible. The business can fund the plan in a strong year and skip it in a lean one. The contribution is deductible against the same tax year it covers, with the deadline running to the business return’s extended filing date.
Employers must include any employee who is at least 21 years old, has worked for the business in 3 of the last 5 years, and earned at least $800 in 2026. An employer can use looser rules, not stricter.
SEP IRAs do not permit employee paycheck deferrals or catch-up contributions. The plan is employer-funded by design.
The Right Plan for the Right Business
SEP IRAs sit between a personal IRA and a 401(k). They allow much larger contributions than a Traditional or Roth IRA (capped at $7,500 in 2026) without the testing, recordkeeping, and Form 5500 that come with a 401(k). The tradeoff: employees can’t defer their own pay into the plan.
A SEP fits when adding a 401(k)’s administrative machinery would cost more than the plan itself: a sole proprietorship, a partnership, a solo practice, or a small firm with a steady handful of employees. It also works as a shelter for a side business that’s outgrown the personal IRA limit. It stops being the right plan when employees want to save from each paycheck (a SIMPLE or 401(k) is the right shape), or when ownership wants to contribute a larger percentage of pay for themselves than for the rest of the staff. Under SEP rules, the percentage has to be the same for everyone.
Setup, Sizing, and Investment
SEP IRAs are simple to set up and easy to ignore. We do both halves.
-
Plan Setup at Schwab
We open the SEP at Schwab and handle the IRS Form 5305-SEP. Schwab is the custodian for every BAM account.
-
Annual Sizing with the CPA
Each year, we work with the owner’s CPA before the filing deadline to size the contribution against the business’s net earnings. For a SEP, that deadline can run through the business return’s extended filing date.
-
Investment Management
The SEP balance is managed alongside the rest of the owner’s household plan. The dollars don’t sit in cash by default, and the position fits a coherent strategy across all the accounts in the household.
-
Same Fee, Either Way
Our management fee is the same whether the SEP gets funded that year or skipped, and whether it’s invested fully or sitting in cash. We don’t earn anything by encouraging a transaction that doesn’t make sense for the business.
A common pattern at onboarding: a self-employed client opens a SEP at a brokerage, makes a contribution, picks a money-market fund, and forgets about it for years. We treat the SEP as one position in the household portfolio. The contribution gets invested where it actually fits, and the allocation gets reviewed at every quarterly check-in alongside every other account.How we handle it
Talk to a Portfolio Manager About a SEP
Call or email. You’ll talk to one of the people managing the money, and one conversation is usually enough to tell whether a SEP is the right shape for the business.