SEP IRAs are ideal plans for business owners, self-employed individuals, or someone operating a business on the side. It is typically preferred by self-employed individuals or business owners with only a few employees.
SEP IRAs offer the following advantages:
- Larger contributions - for 2013, the maximum contribution is the lesser of the contribution amount ($51,000.00) or 25% of the employee's compensation. Since this contribution is larger than the traditional IRA, it means your retirement nest egg can grow even faster than ever - all tax-deferred!
- Flexibility - you may choose how much you want to contribute from year to year, so you're not locked into making a contribution.
The above information is provided for educational purposes and is not intended as tax advice. Please consult a tax professional.