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Wealth management is more than just investment advice – it includes all aspects of a client’s financial life.

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At Virtus Wealth Management, we believe we can help you no matter what age you are, what life stage you are in, or how much money you are working with. We want you to feel educated, empowered, and involved in the planning of your financial future.

Our Top 5 Reasons To Open a SEP IRA (Simplified Employee Pension)

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  • Our Top 5 Reasons To Open a SEP IRA (Simplified Employee Pension)

by | Feb 1, 2021

Do you know what I’m tired of hearing?

I’m tired of hearing about how hard it is for small business owners to save for retirement. Let’s face it, we live in an era where things are easier than ever. We have options today our exemplars never did.

Think about this for a moment. We can start a business, start making sales and provide services from our computer while in our pajamas. In business, nothing is out of reach.

What’s the point?

The point is, we have no barriers (deep down you know it’s true).

Today the myth about retiring as a small business owner gets busted. Today, you will learn our top reasons a SEP IRA (Simplified Employee Pension) can work for you. Sounds impressive, right?

Let’s get down to business and see how it works.

1.  The Invigorating Appeal of a SEP IRA

Before we get into our top 5 reasons to open a SEP IRA lets briefly go over what they are.

A simplified employee pension plan is a conventional IRA, letting self-employed individuals (freelancers) and small business owners save for retirement.

Any small business owner with a minimum of one employee or any person with a freelance income can open a SEP IRA. The contribution guidelines really make this plan stand out from others (more on that later).

A traditional IRA allows you to put away $6,000 a year. This is the annual contribution allowed in 2019 and 2020. If your 50 or older you get a bump up by $7,000 a year for an annual contribution.

With the SEP IRA you can procure almost 10 times more than an IRA or up to  $57,000 in 2020. The annual contributions cannot exceed 25% of your net income.

2.  Simple and Worth It

The ‘simplified’ in SEP IRA is definitely the truth, it is easy and inexpensive. You can get started today saving for your retirement. You can virtually open one at any brokerage firm or financial institution. We would be happy to help you in opening a SEP IRA today!

Then again this is something that needs textbook accuracy. Would you agree?

Virtus Wealth Management is a trusted wealth management solutions firm with immense knowledge and a successful track record.

Our financial advisors specialize in business owner retirement planning.

Why is this important and worth it?

Leaving this decision in the hands of an amateur is unacceptable. Getting the right help is always worth it, saving you time and mental anguish as you move toward retirement.

You can reach us at (817) 717-3812.

3.  But Wait There’s More

For what it’s worth a SEP IRA is the best thing next to sliced bread for a small business owner. You can contribute up 25% of your net income. What about your employees?

Is it just as smooth for them to get involved? Yes, it is.

Generally, as mentioned earlier, SEP IRA’s are best for small business owners with no employees or very few. Or self-employed people freelancing in their niche. In any case, there are some important facts you should know.

If you have employees that the IRS deems eligible for your plan you must contribute on their behalf. In other words, the contributions you make for your employees must match the percentage of contribution you give for yourself.

An eligible employee is 21 years old or older and has been working for you 3 out of the last 5 years and earned a minimum of $600 in the last year.

Example: If you have an employee that worked for you in 2018, 2019, and this year 2020 next year in the plan year of 2021 you would make a contribution on the behalf of your employee.

If you’re stashing away 15% of your net income that year it is required you also contribute 15% of your employee’s compensation for their plan as well.

The best thing is, employees are in control of their own accounts, and can see their progress.

The SEP IRA binds your success as a business owner collectively with your employees. Beyond that, this plan promotes a successful equality retirement strategy (everybody wins).

4.  Who doesn’t Like a Tax Break?

Another tremendous perk about having a simplified employee pension is the tax benefits. Your money stays insulated from the frigid grasp of taxes in your saving years. Allowing you to save for retirement.

Want to know something else?

Your contributions made to your employee SEP’s are tax-deductible too. If your self-employed your deduction is 25% of your net self-employed income.

The tax deductions really are a wonderful perk. You can choose to even wait till tax season and see how you did that year. Made a nice profit this year? Add a higher contribution and get a bigger tax break. Didn’t do so well, add a little less this year, the choice is yours.

Which leads us into our final reason to open a SEP IRA.

5.  Commitment on your terms

Flexibility as a business owner is something you want in an employee.  But it is not something you normally hear about in a pension plan. Well, things have changed.

The SEP IRA empowers you, giving you full control over if you contribute to your plan or not.

What does that mean?

It means you’re not forced to contribute every year. You’re not forced to pay like other plans. (Speak with us at Virtus Wealth Management for more details).

Picture this you’re doing well and you want to start saving a little more. You may supplement your SEP IRA with a traditional IRA or Roth IRA. This is yet another reason this retirement plan needs to be considered if you’re a business owner.

Now It’s Your Turn

Okay, you’ve made it to the end. Now it’s your turn to make a decision.

Can you really afford not too?

The good news is you don’t have to be the person who learns something valuable and does nothing with it.

So take the next step.

These top 5 reasons to open a Simplified Employee Pension is your overview. Your appetizer in their importance for you and your business.

Together with Virtus Wealth Management, we will provide an innovative, and highly customized plan for you, that aims to help secure your retirement. It’s easier than you think.

It’s time to ask yourself…

What’s stopping you?

The information provided here is for general information only and should not be considered an individualized recommendation or personalized investment advice.

The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

This information is not intended to be a substitute for specific individualized tax or legal advice.

We suggest that you discuss your specific situation with a qualified tax or legal advisor.


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