SEP IRA: Simplified Employee Pension Plan
Simplified Employee Pension Plans (SEP IRAs) help self-employed individuals and small-business owners get access to a tax-deferred benefit when saving for retirement.
Reasons to consider a Fidelity SEP IRA
Tax-deferred growth potential
Get access to a wide range of investment options, see them here.
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Must be sole proprietor, a business owner, in a partnership, or earn self-employment income by providing a service
Must be made by the employer
Can vary each year between 0% and 25% of compensation (maximum $54,000 for 2017 and $55,000 for 2018), and each eligible employee must receive the same percentage
Calculate how much you can contribute using our Self-Employed Contribution Calculator.
You also can use our SEP IRA Contribution Worksheet (PDF).
SEP IRAs must be established and funded by your tax filing deadline plus applicable extensions.
As an example, for a sole proprietor April 15 would be the deadline to establish and fund a SEP for the prior tax year. If an extension was filed a sole proprietor can establish and fund a SEP IRA by October 15.
Employee notification of employer's contribution
Employers must fill out and retain Form 5305 SEP (PDF) in their records.
No plan tax filings with IRS
Each employee must open an individual SEP IRA account.
10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply. Penalty-free withdrawals for qualifying first-time home purchase and certain college expenses. Required minimum distributions starting at age 70½.
No fee to open or maintain your account.*
*There is no opening cost or annual fee for Fidelity's Traditional, Roth, SEP, SIMPLE, and rollover IRAs. Fund investments held in your account may be subject to management and short-term trading fees, as described in the offering materials. For all securities, see Fidelity commission schedule (PDF) for trading commission and transaction fee details.
$4.95 per online U.S. equity trade will apply.†