A Simplified Employee Pension IRA (SEP-IRA) is a retirement account for self-employed individuals and small business owners. Contribution limit: up to 25% of net self-employment income or $70,000 for 2026 (whichever is less). Contributions are tax-deductible and grow tax-deferred; withdrawals are taxed as ordinary income. SEP-IRAs are easier to set up and administer than Solo 401(k)s — no annual Form 5500 filing under $250K. Best for sole proprietors with no employees (or willing to fund equivalent percentages for all eligible employees). Compared to Solo 401(k)s, SEP-IRAs lack Roth options and loans but have lower administrative burden.
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SEP-IRA
August 22, 2026 · Aditya Gupta
Personal Finance
Related terms
403(b)
A 403(b) plan is a retirement plan for employees of public schools, nonprofit hospitals, charities, and religious organizations…
457(b)
A 457(b) plan is a retirement plan for state and local government employees and certain nonprofit employees. Unique…
Annuitization
Annuitization is the process of converting a lump sum (or accumulated annuity value) into a guaranteed income stream,…
Annuity
An annuity is an insurance contract paying a stream of income, often for life — designed to provide…
Backdoor Roth Conversion
The Backdoor Roth Conversion strategy enables high earners who exceed Roth IRA income limits to fund a Roth…
Beneficiary IRA
A Beneficiary IRA (Inherited IRA) is a retirement account inherited from a deceased owner. Post-SECURE Act 2019, most…
