The IRA SEP can be set-up at any point during the tax year up until the due date of the employer’s tax return. The administrative expenses are low, and for the self-employed person there are generally no administrative costs at all. One requirement of the IRA SEP is that all employees must receive uniform benefits. Most employers decide on a large mutual fund company to handle the employee’s IRA SEP. This allows the employees to make investment decisions for their own plans, and frees the employer from needing to make those decisions. The plan functions in the same manner as a pension plan but on a simpler scale and with no filing necessary . The IRA SEP can also be rolled over into other forms of IRAs if employment changes, so it is conveniently portable. It’s an excellent choice for the small company wanting to offer a pension plan, but lacking the resources to set up a conventional kind of plan. The IRA SEP is easy to understand and simple to administer . It was designed to benefit the self-employed and small business owners, and is also a popular choice for LLCs, partnerships, S and C Corporations, and sole proprietorships. Contribution limits are generous in the IRA SEP, and are generally 100% tax deductible. Investment earnings in the IRA grow tax-deferred. Withdrawals can begin as early as age 59 ½ years old, although earlier withdrawal triggers a 10% IRS penalty in addition to income taxes on the withdrawal The distributions must begin no later than age 70 ½ years of age. An IRA SEP is a smart alternative for owners of a small business who would like to help employees get ready for retirement, but are unable to manage a more conventional retirement plan. Since contributions can be up to 25% of the employee’s compensation, there is the opportunity to rapidly grow a retirement nest egg in the IRA SEP.