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
- Simple to maintain, with limited recordkeeping
- Low cost
- Useful for attracting and retaining 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)
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.
Connect with WoodmenLife
To learn more about purchasing our life insurance or retirement products, fill out the Get a Quote form or search for your local Representative. Your Representative will contact you to prepare a customized plan that best meets your specific needs and budget.
WEB70 - 4/1/2019