Simplified Employee Pension Plans

Put retirement within reach with an SEP IRA

A Simplified Employee Pension (SEP) from SMCU is a great way for self-employed people or small business owners to save for life after work - and to help employees do the same. Contributions are made to an Individual Retirement Account, or IRA, which is why these accounts are labeled SEP IRAs.
 

SEP IRA basics

• Who can use SEP IRAs: any sole proprietor, freelancer, or business owner with one or more employees.
• Contributions: are tax-deductible and go into a Traditional IRA under the employee's name*
• Employees: do not contribute; instead, all contributions are made by the employer
• At withdrawal: the money is taxed (like a Traditional IRA)
• Eligibility criteria: employee must be at least 21 years old, have worked for the company during three of the past five years, and received the eligible compensation amount from your business for the year (see irs.gov/sep for rules and regulations)

Is a SEP IRA right for me?

As with any retirement account, your best bet is to learn more from a trusted professional at San Mateo Credit Union, a tax professional, or an attorney. But, in general, many sole proprietors and freelancers find SEP IRAs very helpful. You can put away up to 25 percent of your net income, up to a yearly limit set by the IRS (for 2023, the limit is $66,000). So true to their name, these accounts do simplify the savings process.

Please give us a call at (650) 363-1725 or stop by a branch to talk through your options for retirement savings.