Get the basics
SEP or SIMPLE IRA?
SEP IRAs (Simplified Employee Pension Plan) and SIMPLE IRAs (Savings Incentive Match Plan) were created specifically for self-employed individuals or small business owners and their employees. Contributions help you and your employees get ready for retirement.
Help me choose
How SEP and SIMPLE IRAs differ
| Best For | SEP IRA
Self-employed individuals or small business owners with few employees who want an IRA option with no mandatory annual contributions | SIMPLE IRA
Self-employed individuals or small business owners with 100 or fewer employees who want to allow their employees to make contributions in addition to the employer contributions |
| Who can contribute? | SEP IRA
Employer only | SIMPLE IRA
Employer and employees |
| Contribution Guidelines | SEP IRA
Employer contributions not required
Employer can contribute up to 25% of an employee’s salary or $55,000 (in 2018), whichever is less | SIMPLE IRA
Mandatory employer contributions
Employer can make matching contributions to their employee’s accounts, up to 3% of salary regardless of whether the employee contributes.
Employers can fund an employee’s account, up to 2% of their salary, even if the employee decides not to contribute |
| Eligibility | SEP IRA
Employees set up by business owner
An employee must:
| SIMPLE IRA
Business owner and all employees selected to participate
An employee must:
|
| Administration | SEP IRA
No annual tax filings | SIMPLE IRA
Reduced paperwork
No annual IRA fees |
Next steps
How to set up a retirement plan for your small business
Small business plans
Open a SEP IRA
This plan requires no mandatory contributions and is designed for a business with few employees.
SMALL BUSINESS PLANS
Open a SIMPLE IRA
Get started with a retirement plan for 100 or fewer employees, with required annual contributions and matching employee contributions.
Discover more
Why TIAA
Are you leaving money with an ex-employer?
You can roll the funds from a former employer’s retirement plan over to your current TIAA plan.1
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