A Simplified Employee Pension IRA (SEP IRA) plan is a type of workplace retirement plan that allows an employer to contribute tax-deductible dollars to the owners and the employees retirement account. SEP IRA plans are funded solely by employer contributions (employee deferrals are not permitted); each eligible employee generally receives the same percentage of their individual compensation amount, and that percentage is at the discretion of the employer from year to year.
An employer can set up a SEP IRA with the following maximum eligibility requirements (but can choose to be more lenient):
This plan is flexible and works for any size and type of business.
You may be a one-person business, but that doesn't mean you can't save for retirement like others at large companies. The owner-only 401(k) plan is designed for business owners – with no employees other than their spouses – who want to increase or maximize pre-tax and post-tax retirement contributions with flexibility. Self-employed individuals, corporations and partnerships can set up this plan.
This plan is only available to business owners who have no employees other than their spouse.
*These limits are subject to change each year per IRS guidelines
You can help your employees save for retirement with tax-deductible and after-tax contributions. Pathway Wealth Management can help you determine what plan is the right plan for your business.
Here are some of the retirement plan options we offer for business owners with employees:
This type of plan can be complex, but very flexible. It works best with a third-party administrator for plan compliance, document maintenance, required compliance testing and IRS Form 5500 filing.
A Simple IRA allows you and your employees to contribute to the plan through salary deductions. You're also responsible for making contributions to the plan. Consider this plan if:
Safe Harbor 401(k):
With a Safe Harbor 401(k), you, as the business owner, must be willing to make required contributions in the form of a match or non-elective contribution. Any size business may find these plans attractive, but take a closer look if:
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