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Individual Retirement Accounts

For Business Owners

Quick start, low maintenance, and contribution flexibility make — SEP and SIMPLE — IRAs a great choice for business owners and self-employed individuals

Simplified Employee Pension Plan — SEP IRA

Self-employed individuals, sole proprietors, partnerships, and small corporations can start a SEP-IRA without the government reporting and administrative expenses associated with other employer-sponsored retirement plans like profit sharing or 401(k) plans.

Each year, you can contribute up to 25% of your compensation or $61,0001, whichever is less. The annual compensation that you may take into account to figure your contribution is $305,0001. You can deduct any contributions you make and your earnings potentially grow tax deferred.

  • Affordable cost.
  • Annual contributions are not mandatory.
  • No annual IRS filing requirements.
  • Easy to establish — you have until your tax filing deadline, including extensions.
  • 100% immediate vesting.
  • Part-time employees may be eligible.
  • Contributions made by employer.
  • No loans.

Savings Incentive Match Plan for Employees — SIMPLE IRA

The SIMPLE IRA, or Savings Incentive Match Plan for Employees-IRA, is designed primarily for sole proprietors or small businesses with fewer than 100 employees. While it offers many of the same advantages as a 401(k), it also has lower costs, fewer government filing requirements and greater affordability.

In a SIMPLE IRA, you have the ability to defer pre-tax salary into a retirement savings plan that offers a wide selection of investment choices and tax-deferred compounding growth on any earnings.

The employer who starts a SIMPLE IRA must match dollar for dollar the first 3% of employee contributions or contribute 2% of compensation for all eligible employees. You also make this matching employer contribution to your own IRA. Employer contributions are tax-deductible to your business.

If you decide a SIMPLE IRA is best for your business, keep in mind increasing contribution limits so you can increase your tax-saving benefits each year.

  • Easy to set-up and inexpensive.
  • Employees can contribute.
  • No annual filing requirements.
  • 100% of salary is deferrable up to annual limits.
  • Employer can contribute even if employees choose not to participate.
  • 100% immediate vesting.
  • Employer contribution is mandatory.
  • No other retirement plan can be in effect.
  • No loans.
  • Must be set-up by October 1 to contribute for the current year.
  • Maximum annual contribution may be lower than other retirement plans.

To set up your tax-advantaged IRA today or to determine which type SEP or SIMPLE fits your situation, please consult with one of our Retirement Program Specialists by calling 1-800-523-1125 today!

Be sure to consult your tax advisor for specific advice.

1 These limits apply no matter how many IRAs you have, or if you have both a Traditional IRA and a Roth IRA. Contribution and compensation limits are subject to annual cost-of-living adjustments.

Tax-qualified retirement plans such as IRAs and SEPs already provide tax deferral under the Internal Revenue Code. Tax deferral of an annuity does not provide additional tax benefits. Before purchasing an annuity you should consider whether its features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative features, benefits and costs of this annuity contract compared with other investment that you may use to fund your IRA.

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