Simplified Employee Pension Plan (SEP) is s retirement program for self-employed people or owners of companies with less than 25 employees, allowing them to defer taxes on investments intended for retirement. This plan allows employers to contribute on behalf of eligible employees, and all contributions are tax-deductible as a business expense and can be integrated with Social Security contributions. In addition, there is no minimum contribution requirement.

From the employer prospective, retirement plans are a wonderful benefit to implement in order to attract and retain employees. There are now many variations of these plans that reduce the record keeping burden, and cost associated with establishing and maintaining company retirement accounts.

From the participants prospective, 401ks, IRA’s and all qualified retirement accounts are wonderful tools for growth during the accumulation phase of money. Careful planning is necessary when using these funds for a majority of one’s retirement assets due to the possible challenges of these accounts during the distribution and preservation phases of money. For example: If the tax structure should increase in future years then tax distributions would be at a higher rate than when contributions were made. This would create a reverse tax strategy.