Choosing between a SIMPLE and SEP Plan
If you’re a small business owner, offering a retirement plan can help you save for your own future and attract great employees.
As a small business owner, you have some options related to offering retirement plans.
Feature | SIMPLE | SEP |
|---|---|---|
Who Can Contribute | Employer & Employees | Employer only |
Contribution Limits (2025) | $16,000 ($19,500 if 50+) + employer match | Up to 25% of compensation or $69,000 |
Employer Requirements | Must contribute (match or fixed % for all) | Flexible- can skip in lean years |
Best For | Small businesses with steady revenue and employees who want to contribute | Self-employed or businesses with fluctuating cash flow |
When to Choose SIMPLE:
· You have multiple employees who want to save for retirement
· You can commit to annual contributions
When to Choose SEP:
· You want high contribution limits
· Your income or profits vary year to year
· You have few or no employees
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