• What is an IRA?
  • Traditional IRA
  • Roth IRA
  • SEP IRA
  • The Benefits of Consolidating Into a TIAA-CREF IRA
  • Eligibility
• How an IRA can Help
• About the TIAA-CREF IRA
• Create
• Contribute
• Consolidate

SEP IRA

What is a SEP IRA?
A Simplified Employee Pension Plan, otherwise known as a SEP IRA, is a retirement plan specifically designed for anyone with self-employment income (for example, self-employed individuals and small business owners). A SEP IRA can help you contribute to your retirement savings while reducing your taxable income.

The advantages of a SEP IRA
SEP IRAs have a number of advantages over other retirement plans, including:

• Tax-deductible contributions up to 25% of compensation (up to $49,000 in 2009, the highest limit allowed by law)
• Tax-deferred growth potential until withdrawal
• No mandatory contributions or annual tax filings
• Ease of establishing and maintaining the plan
• Reduced paperwork
• Tax-deductible contributions can help decrease current taxes, and tax-deferred compounding can help both employers and employees build retirement assets. Consult your tax advisor for additional information.

Who can contribute to a SEP IRA
Anyone who:

• is a sole proprietor
• is in a business partnership
• is a business owner
• has self-employment income earned by providing a service
• is an employee of someone who establishes a SEP IRA for his/her employees

In addition:

• Employers are not required to contribute the same percentage of compensation every year — they may vary the percentage each year, or skip a year altogether. However, in any given year, an employer must contribute the same percentage of compensation for each eligible employee.
• SEP IRA contributions must be made by the due date (including extensions) of the employer's tax return. SEP IRA contributions are reported on Form 5498 in the calendar year in which they are received. Your tax form may reflect both current and prior year contributions, if both were received in the same calendar year. Please consult your tax advisor for more information.

• Visit the Learning Center to see SEP IRA contribution limits and withdrawal options.
• Get started with a TIAA-CREF SEP IRA.