What is a SEP-IRA?
A SEP-IRA (Simplified Employee Pension) is an easy to administer retirement plan for anyone who is self-employed, owns a business, employs others, or earns freelance income.
Who can participate?
Employers are generally the sole contributors, but employees may be able to make traditional IRA contributions to the SEP-IRA.
Traditional IRA
A tax-deferred individual retirement account. Contributions are fully deductible for all individuals who are not active participants in employer-sponsored plans or for plan participants within certain income ranges.
Investment choices
If you're opening a SEP-IRA for more than one person, you can choose from a variety Vanguard mutual funds. Other types of investments don't apply. However, if you're opening a one-person SEP-IRA, you can choose from Vanguard mutual funds, Vanguard ETFs®, mutual funds and ETFs from other companies, individual stocks, CDs (certificates of deposit), and bonds.
Who can use the plan?
Generally, employees must be allowed to participate if they're 21 or older, earn at least $750 in the tax year, and have worked for you in at least 3 of the past 5 years. You can set less restrictive eligibility rules if you choose.
- Certain employee 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?
Need to open a SEP-IRA that will be funded by your employer?
Ready to get started?
Set up your new SEP-IRA today!
Looking to open a SEP-IRA for yourself?
Need to open a SEP-IRA that will be funded by your employer?
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.
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.
All investing is subject to risk, including the possible loss of the money you invest.
Advice services are provided by Vanguard Advisers, Inc., a registered investment advisor, or by Vanguard National Trust Company, a federally chartered, limited-purpose trust company.
The services provided to clients who elect to receive ongoing advice will vary based upon the amount of assets in a portfolio. Please review Form CRS and the Vanguard Personal Advisor Services Brochure (PDF) for important details about the service, including its asset-based service levels and fee breakpoints.