Simplified Employee Pension (SEP) IRAs
A Simplified Employee Pension (SEP) IRA offers self-employed Members and small business owners an easy and low-cost plan to save for their own and their employees’ retirement. The SEP IRA offers many of the same tax benefits as profit sharing or a 401(k), but features simpler administration rules. Employers are not required to make contributions in any year or to maintain a certain level of contributions to a SEP-IRA plan. This gives small businesses more flexibility to change their annual contributions based on the performance of the business.
SEP IRA Features
- Easy to set up, no separate IRS reports
- Contributions are due by the employer's tax-filing deadline, including extensions
- 100% portability – if an employee leaves the company they receive all of their retirement funds
Employee Eligibility Requirements
- 100% of those eligible to participate must do so
- Must be at least 21 years old
- Must have received more than $450 in payment during the year
- Must have worked for the company during the contribution year and 3 of the preceding 5 years
- Up to 25% of the employee’s annual compensation or $40,000, whichever is less*
*For 2003 and later years, this amount is subject to annual cost-of-living adjustments. The IRS announces the increase.
*Representatives are registered, securities are sold, and investment advisory services are offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC
, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by SchoolsFirst FCU. CBSI is under contract with SchoolsFirst FCU, through the financial services program, to make securities available to Members.
CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty states of the United States of America.