SEP – Simplified Employee Pension
SEP plans can provided a large amount of funds available for retirement. Up to 25% of compensation ($50,000 max) can be added to this plan annually. SEP’s do not have start up costs or administrative fees making the setup process rather simple.
In this type of plan the employee does not contribute to the SEP, only the employer. The percentage of salary contributed must be the same for all employees. Each employee would open a SEP with a brokerage company such as TD Ameritrade.
An employee must have worked for the employer in at least 3 of the last 5 years and received at least $550 per year in compensation. An Employer can reduce these requirements at the setup of the plan.
It is great that you are choosing a retirement plan but remember that you should choose your investment options just as wisely. Pay close attention to price vs. performance. For every percent that you spend in fees, that is less money available to you and your employees at retirement.
Visit the IRS website to learn more or call us at 678.905.4450 ext 1.