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.
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.
- SEP-IRA for one person plan: See Vanguard annual account service fees
SEP-IRA plan for more than one person:
$20 for each Vanguard mutual fund in each account.
We'll waive the fee if you have at least $50,000 in qualifying Vanguard assets. See what Vanguard assets qualify
- 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!
Ready to get started?
Set up your new SEP-IRA today!
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 for important details about the service, including its asset-based service levels and fee breakpoints.