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Contribute to Retirement Savings with a SEP IRA

Small businesses can help workers increase their retirement savings by contributing a percentage of the employees’ earned income to a Simplified Employee Pension (SEP)1. Employers offering SEPs cannot provide other retirement plans, except another SEP. The SEP – unlike the SIMPLE IRA – does not allow employee contributions, but an option exists for eligible workers also to contribute to Individual Retirement Annuities (IRAs).

Why SEPs are Beneficial

For Employers:

  • Simple to maintain, with limited recordkeeping
  • Low cost
  • Useful for attracting and retaining employees

For Employees:

  • Immediate 100-percent vesting
  • Employee ownership of the SEP, which is entirely funded by the employer
  • Earnings are tax-deferred until withdrawal2 (usually at retirement)

Self-Employed Contributions

An SEP option exists for self-employed individuals and allows contribution amounts based on how the business is set up:

  • Self-employed individuals with incorporated businesses can contribute up to 25 percent of his or her W-2 income, up to the IRS limit.
  • Contributions for sole proprietors are based on 20 percent of adjusted earned income.

What's next?

Your Representative will prepare a customized plan that best meets your specific needs and budget. Get started by connecting with your Representative.

Learn More


  1. ICC10 87 4-10, 87 4-10 (XX), O-87 4-10 (XX)
  2. WoodmenLife surrender charges may apply to withdrawals of contributions and earnings.

WEB70 - 4/1/2019