(Simplified Employee Pension plan)

Easy, inexpensive plan for self-employed individuals and small businesses

  • Flexibility with employer contributions
  • Employer contributions deductible as a business expense
  • Offers a full range of investment choices
  • Use the Small Business Selector to find a plan

Up to 25% of compensation

or $55,000 in 2018 ($56,000 in 2019), whichever is less


Self-employed individuals without retirement plan coverage2

Eligibility information - image

Eligibility information

Available for self-employed individuals and owners of small businesses. Employees must be age 21 or older, receive annual compensation of $600 or more, and have worked for the company for at least three of the past five years.

Set up and contribution deadline - image

Setup and contribution deadline

Account must be established and funded by the employer's tax filing deadline (plus extensions)

The flexibility to invest how you want - image

The flexibility to invest how you want

Let E*TRADE Capital Management manage your account, or diversify with a choice of mutual funds, ETFs, stocks, and more

Easy setup and administration - image

Easy setup and administration

IRS Form 5500 filing not required


Get up to $600 plus 60 days of commission-free trades for deposits of $10k or more.1 How it works


Get up to $600 plus 60 days of commission-free trades for deposits of $10k or more.1 How it works


See all FAQs

Already have a SEP IRA? Contribute now.

Can an individual make contributions to a SEP-IRA while also contributing to a Traditional IRA?

Yes. However, since an individual will be considered an active participant in an employer-sponsored retirement plan, some or all of their personal IRA contributions may not be deductible. Refer to the Contribution Limits & Deadlines table for more information.

How much can a sole proprietor or unincorporated business contribute to a SEP-IRA?

If a business owner receives compensation as personal income, such as a sole proprietor or unincorporated partnership, the annual contribution limit is up to 20% of their net adjusted self-employed income or net adjusted business profits.

Is it possible not to include employees in a SEP-IRA plan?

All employees age 21 or older who have worked for the business owner in three of the past five years and earn $600 or more must be included.

What are the basic distribution rules for a SEP-IRA?

Withdrawals from a SEP IRA are subject to Traditional IRA distribution rules. SEP IRA distributions may be taken at any time and are taxable in the year distribution occurs. Withdrawals taken prior to age 59½ are subject to an additional 10% early distribution penalty.

Can I open a SEP-IRA if my business has been open less than five years?

Yes, a business owner can use less restrictive participation requirements than those listed by the IRS, but not more restrictive ones. For example, IRS participation requirements state that an employee must have worked for the company in at least three of the past five years. Employers are permitted to decrease or remove this requirement; however they are not permitted to increase it. This also applies to self-employed business owners.

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