WHAT IS A SEP IRA?

A SEP (Simplified Employee Pension) plan is a written arrangement that allows an employer, including self-employed individuals, to make contributions toward his or her own and employees' retirement plans without becoming involved in more complex arrangements.
 
The contributions are made to a Traditional Individual Retirement Account (IRA) of each participant of the plan, hence the term SEP-IRA.

Each participant under the SEP may establish his or her own IRA at the institution of his or her choice. As the underlying account is an IRA, any covered employee may have a self-directed IRA as his or her SEP-IRA.
 
This is in addition to any other IRAs that one has.

  Contribution Limitations

Contributions are limited to 25% of compensation to a maximum dollar amount.
 
 Please contact one of our IRA specialists for the current dollar limits
 
Contributions may vary from year to year between 0% and 25% of Modified Adjusted Gross Income, or W-2 compensation, not in excess of $200,000. If contributions are made, they must be made in accordance with set rules that the employer establishes. These rules may include eligiblity restrictions, based on age and length of service.

Roth IRAs are not eligible for SEPs, however IRAs to which SEP contributions have been made may be converted to Roth IRAs.