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 brokerage SEP-IRA is designed for anyone who is self-employed and doesn't employ others. For information on a SEP-IRA plan for you and your employees, please visit Ascensus.

SEP-IRA contribution limits

  • You can contribute up to 25% of your total compensation or a maximum of $66,000 for 2023 tax year or $69,000 for the 2024 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 $330,000 for 2023 or $345,000 for 2024.)

  • 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 $7,000 ($8,000 for individuals age 50 or older) for the 2024 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)

Ready to get started?

Set up your new SEP-IRA today!

Looking to open a SEP-IRA for yourself?

Open a Vanguard SEP-IRA

Learn more about small-business retirement

Enhance your retirement plan

Looking to enrich your existing retirement plan with quality mutual funds? Our investment-only service opens the door for you to offer Vanguard funds. 

Learn about our investment-only option

Move your plan to Vanguard

Consider moving the small-business plan you hold elsewhere to Vanguard. You can enjoy high-quality, low-cost funds and reliable service for your portfolio.

Learn how to transfer your plan

Frequently asked questions

See what Vanguard assets qualify

 

Eligibility is first calculated using qualifying assets for an individual client. We then combine the qualifying assets of clients sharing a residential address to determine final eligibility*.

Assets that qualify

 

  • Any assets under management of Vanguard Personal Advisor Services.
  • Vanguard mutual funds and Vanguard ETFs held by a client in certain personal accounts qualify. Personal account types include: individual non-retirement, education savings accounts, IRAs, Joint, Trust, Custodian, Guardian, UTMA, UGMA, Estate, Sole Proprietorship, and Single-Participant SEP IRA plans.

Note: Vanguard assets in a Vanguard 529 Plan, Vanguard Variable Annuity, Multi-participant SEP IRA plans, SIMPLE, i401k, 403(b), family partnership, family corporation, or employer-sponsored retirement plans for which Vanguard provides recordkeeping services may be included in determining eligibility if you also have a personal account holding Vanguard mutual funds or Vanguard ETFs. Assets held in other account types are not eligible to be included in service eligibility determination.

We review qualifications periodically

The qualification criteria (for example, asset levels) are reviewed periodically and could change at any time. Vanguard reserves the right to discontinue enrollment in any of these services or reassign any investor, without prior notification, to the appropriate service level if the investor fails to continue to meet the applicable qualification criteria. Vanguard reserves the right to amend or cancel selected features and benefits at any time without prior notification.

In addition, ongoing access by any particular investor to individual services, discounts, and exemptions is subject to periodic review and may be restricted based upon criteria established solely by Vanguard. While these services are complimentary, some underlying services may charge fees and expenses. Vanguard does not guarantee any level of service.

*Business addresses and other non-residential addresses are not eligible to be aggregated for purposes of determining services.

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

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

  • 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.

Ready to get started?

Set up your new SEP-IRA today!

 

Looking to open a SEP-IRA for yourself?

Open a SEP-IRA

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