What is a Simplified Employee Pension IRA (SEP IRA)?

A SEP IRA is a type of retirement plan for those who are self-employed or who are small business owners. At Betterment, we currently only support SEP IRAs for those who are self-employed or small business owners with no employees.

A SEP IRA can be a simple and efficient way for self-employed individuals and small business owners to save for retirement without the stress of complicated plan administration. Betterment supports SEP IRAs for only one plan participant. Typically, small businesses with two or more participants may also set up a SEP IRA for multiple employees. However, Betterment does not support this type of SEP IRA at this time.

SEP IRA contributions are treated like Traditional IRA contributions and are based on self-employed income. In general, contribution limits for SEP IRAs are higher than contribution limits for Traditional and Roth IRAs.