Retirement plans for small business

Call 800-842-2888 for information.

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.

What is an IRA?
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 salary $69,000 in 2024 or $70,000 in 2025, 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:

  • Be 21 years old
  • Have worked three of the last five years for the employer
  • Have at least $750 of compensation for the year

SIMPLE IRA

Business owner and all employees selected to participate

An employee must:

  • Have had compensation of at least $5,000 in any of the two prior years
  • Be reasonably expected to earn $5,000 in the current year
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.

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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.

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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 plan1.

Explore your options
Insights

Investing 101

Get familiar with investing concepts and terminology.

Learn more

1 Prior to rolling over, consider your other options. You may also be able to leave money in your current plan, withdraw cash or roll over the assets to your new employer’s plan if one is available and rollovers are permitted. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. Speak with a TIAA consultant and your tax advisor regarding your situation. Learn moreOpens pdf.

This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.

 

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