SEP-IRA

What's a SEP-IRA?

A SEP-IRA (Simplified Employee Pension) is a retirement account for anyone who is self-employed, owns a business, or earns freelance income.

Who can participate?

Vanguard's SEP IRA is designed for self-employed individuals and business owners that don't employ others.

SEP-IRA contribution limits

  • You can contribute up to 25% of your total compensation or a maximum of $70,000 for 2025 tax year or $72,000 for the 2026 tax year, whichever is less.

  • If you're self-employed, your contributions are generally limited to 20% of your net income. (Net compensation for self-employed individuals is generally the net profit from IRS Schedule C reduced by the deductible self-employment tax. The eligible compensation limit, indexed for inflation by the IRS, is $350,000 for 2025 or $360,000 for 2026.)

  • Contributions are deductible and aren't required every year.

  • SECURE 2.0 allows employers of SEP-IRAs to offer the ability to make Roth contributions. At this time, Vanguard will not be offering this option.

Individual contribution limits

  • Unlike other plans, individuals can't defer their salary to make contributions to a SEP-IRA. They may be able to make traditional IRA contributions to a SEP-IRA of up to $7,500 ($8,600 for individuals age 50 or older) for the 2026 tax year.

  • The individual contribution limit is the total contribution allowed by the IRS that individuals can make to all their IRAs (SEP, traditional, or Roth) each year.

Investment choices

You can choose from Vanguard mutual funds, Vanguard ETFs®, mutual funds and ETFs from other companies, individual stocks, CDs (certificates of deposit), and bonds.

Browse Vanguard's complete mutual fund lineup

Browse Vanguard's complete ETF lineup

Who can use the plan?

Anyone who is self-employed and doesn’t employ others can open a SEP-IRA with Vanguard. Please refer to the IRS form below for more information on eligibility requirements.

Refer to IRS Form 5305-SEP for more details (PDF)

Pairs with other plans

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Rollover IRA

Have money in an old employer plan? Move it to a flexible Vanguard IRA in 3 easy steps.

Explore rollover IRAs
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Roth IRA

Anyone can open a Roth IRA. Take advantage of tax-free growth on your retirement savings.

Explore roth IRAs
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Spousal IRA

Even when one spouse isn't working, you may both still be able to contribute to an IRA.

Explore spousal IRAs

Ready to get started? Set up your new SEP-IRA today.

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Frequently asked questions

What’s the cost to open a Vanguard SEP-IRA?

There's no fee to establish an account. See Vanguard annual account service fees for more details

Is there any account maintenance involved?

Certain notifications are required, but there's no IRS reporting.

What are the rules around withdrawals and loans from my Vanguard SEP-IRA?

  • All contributions to your SEP-IRA belong to you immediately, and you can withdraw them at any time.

  • You can't take a loan from your SEP-IRA.

  • If you withdraw before age 59½, you're subject to a 10% federal penalty tax. Certain expectations may apply. You'll pay ordinary income tax on any taxable distributions.

All investing is subject to risk, including the possible loss of the money you invest.

Vanguard Fiduciary Trust Company serves as the custodian of Vanguard IRAs.