Key Attributes of SEP IRAs
- Employee contributions: Not allowed
- Employer contributions: Optional, but must be equal % for all employees
- Maximum total (2024): Lesser of $69,000 or 25% of compensation
- Administration: Minimal — no annual filings required
- Ownership: Assets belong to employees and are individually managed
What to consider: SEP IRAs offer administrative simplicity and generous contribution limits. However, they do not allow catch-up contributions for employees over age 49. Required minimum distributions begin at age 72, even if the employee is still working.
