SEPs are IRA accounts established by a business for business owners and employees. They can be used by Corporations, Partnerships, LLCs, or sole proprietors of any size.
The two main advantages of these plans are:
- Ease of set up
On top of that, they're easy to administrate and don't require direct investment responsibility from the employer.
These plans allow for flexible contributions and have easy-to-understand contribution formulas. In a SEP IRA, employers makes the contributions and eligibility rules are straight forward.
We educate our business owners on the nuances of these types of plans and how they may be best suited to provide for the needs of the employer and employee.
Although these plans have some different features than other retirement plans that are important to understand, your investment options aren't constrained to a specific set of mutual funds, as is often the case with other retirement plans.