SEP IRA
(Simplified Employee Pension plan)
Plan for self-employed individuals and small businesses
- Flexibility with employer contributions
- Employer contributions are generally deductible as a business expense
- Offers a full range of investment choices
- Use the Small Business Selector to find a plan
Contribution Limit
Maximum total contributions up to $70,000 for 2025 ($69,000 for 2024) or 25% of compensation (or 20% of net earnings from self-employment for self-employed individuals), whichever is less, with compensation taken into account capped at $350,000 for 2025 ($345,000 for 2024)
9M
Self-employed individuals without retirement plan coverage2
Get up to $10,000 for a limited time1
Open and fund a new eligible retirement account with a qualifying deposit by July 31, 2025. Learn how
Terms apply. Use promo code: RETIRE25
Why a SEP IRA?
Eligibility information
Available for self-employed individuals and owners of small businesses
Eligible employees include all who are age 21 or older, receive annual compensation of $750 or more for the year, and have worked for the company for at least three of the past five years. Less restrictive eligibility requirements may be elected by the employer.
Flexibility
Diversify with a choice of mutual funds, ETFs, stocks, and more
Reduced administrative requirements
For example, IRS Form 5500 filing is not required if certain requirements are met
Trade more, pay less
With E*TRADE from Morgan Stanley, you pay $0 commissions for online US-listed stock, ETF, mutual fund, and options trades. Here’s a quick overview of our clear, competitive per-trade pricing.1
SEP-IRA 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 $750 or more for the year must be included.
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.
Explore similar accounts
Traditional and Roth Individual 401(k)
Retirement plan for the self-employed
Retirement plan for business owners and their spouses that is simpler to administer than a typical 401(k).
SIMPLE IRA
For businesses with fewer than 100 employees
Retirement plan with deductible employer and employee contributions.
Get up to $10,000 for a limited time1
Open and fund a new eligible retirement account with a qualifying deposit by July 31, 2025. Learn how
Terms apply. Use promo code: RETIRE25