Self-employed workers and small-business owners who want an easy and inexpensive retirement plan should consider a Simplified Employee Pension IRA, or SEP IRA. SEP IRA plans are easier to establish than other retirement plans and typically have lower administrative costs.
The main advantage of a SEP IRA is that you can contribute up to 25% of your compensation, with a maximum of $72,000 in 2026, per the IRS. These contributions are tax-deductible, and the earnings are tax-deferred. However, one key drawback is that there are no catch-up contributions for older workers.
