Any employer, including self-employed individuals, can establish a SEP plan. Contributing to a SEP IRA won’t prevent you from also contributing to either a Roth IRA or a Traditional IRA. However, access to a workplace retirement plan might impact if you can deduct Traditional IRA contributions.
A Simplified Employee Pension (SEP) Plan IRA account or a SEP IRA has different contribution limits than a Traditional or Roth IRA.
For 2021, SEP IRA employer (included self-employed individuals) contributions cannot exceed the lesser of:
1. 25% of the employee’s compensation, or
2. $58,000
For 2022, SEP IRA employer (included self-employed individuals) contributions cannot exceed the lesser of:
1. 25% of the employee’s compensation, or
2. $61,000
For additional information on contributing to a SEP IRA, please visit: