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SEP (Simplified Employee Pension) IRA

General Description Small business owners can make tax-deductible contributions with this flexible plan that is easy to set up and maintain. If you have employees, you may be required to contribute for them as well.

A Simplified Employee Pension (SEP) plan may work well if you want a low-cost, easy-to-maintain retirement plan for you and your employees. Both SEP IRA and Traditional IRA contributions can be made to the same account, and you have the flexibility to change how much your business contributes from year to year.
Eligibility to Contribute You can contribute at any age if you are self-employed or a small business owner.
Maximum Annual Contribution
  • 2014 tax year: As a small business owner you can contribute up to 25% of your compensation or $52,000, whichever is less.
If you have employees, you may be required to contribute for them as well.
Tax-Deductible Contributions As a small business owner you can deduct your contributions for yourself and your employees from your company's federal taxable income.
Taxation of Earnings and Withdrawals Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.
Types of Investments
  • Stocks, bonds and mutual funds available through Wells Fargo Advisors brokerage IRAs
  • Savings accounts and CDs (Time Accounts) available through Wells Fargo Bank, N.A., Member FDIC
Minimum Initial Investment Varies by account from $0 to $100,000
Withdrawal Penalties 10% IRS early withdrawal penalty if withdrawn before age 59 ½ unless an exception applies.

  • Death
  • Disability
  • Medical expenses in excess of 7.5% of AGI
  • Health insurance premiums if unemployed for 12 consecutive weeks
  • Qualifying higher education expenses
  • Qualifying first time home purchase ($10,000 lifetime limit)
  • Substantially equal payments made over life expectancy
  • Qualified military reservist
Required Withdrawals Must begin at age 70 ½
Deadline to Set Up and Fund You may establish and fund up through the business' tax filing due date plus extensions.
Commissions and Fees Varies by account and investment option
Learn more about saving for retirement; contact a Wells Fargo financial professional today!
Investment and Insurance Products: Are Not insured by the FDIC or any other federal government agency - Are Not deposits of or guaranteed by the Bank or any Bank Affiliate - May Lose Value
Brokerage products and services including WellsTrade are offered through Wells Fargo Advisors. Wells Fargo Advisors is the trade name used by two separate registered broker-dealers: Wells Fargo Advisors, LLC and Wells Fargo Advisors Financial Network, LLC, (Members SIPC), non-bank affiliates of Wells Fargo & Company.
Financial Advisors are registered representatives of Wells Fargo Advisors LLC, member SIPC, a non-bank affiliate of Wells Fargo & Company.
Wells Fargo Advisors, LLC (Member SIPC) does not provide tax or legal advice. Please see your tax and legal advisors to determine how this information may apply to your own situation.
Information published by Wells Fargo Bank, N.A., Wells Fargo Advisors, or one of its affiliates as part of this website is published in the United States and is intended only for persons in the United States.