What is a SEP IRA?
SEP IRA stands for Simplified Employee Pension (SEP) and is a flexible retirement plan that allows you to contribute more when business is strong and to cut back as needed. Self-employed people can use SEP IRAs, and do not have to have additional employees.
Who should get a SEP IRA?
Having higher contribution amounts, SEP IRAs are great for self-employed individuals that are actively looking to start building their retirement portfolio or are looking to maximize their tax savings.
How much can you contribute to a SEP IRA?
The amount you can contribute or put in is percentage-based and capped at a certain amount. For the year 2022, individuals can contribute the lesser of 25 percent of their income or $61,000. These amounts change each year per IRS guidelines.