What is SEP-IRA?
Definition A SEP-IRA is a simplified, employer-funded retirement plan often used by self-employed people and small businesses. The employer contributes a percentage of compensation up to a generous annual limit, and the plan is easy to set up with minimal paperwork. A related option, the SIMPLE IRA, allows both employee and employer contributions for small firms with staff.
Its high limits and simplicity make it a popular way for small-business clients to reduce taxable income while building retirement savings.