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Whether you are self employed or have employees, benefit from the flexibility to contribute as your cash flow allows, the potential for tax-deferred retirement growth and contribution limits nearly 10 times higher than a Traditional IRA. Below, you'll find answers to frequently asked questions about SEP IRA plans, rules, contribution limits and more.

Why should I consider opening a SEP IRA instead of a Traditional IRA?

With a SEP IRA, your business and employees (including you) can benefit. Contributions you make to the individual accounts under your plan are generally tax deductible by your business.Footnote 1 You also have the opportunity to contribute nearly 10 times more to a SEP IRA than a Traditional IRA.

What are the contribution limits for a SEP IRA?

Employer contributions are limited to the lesser of $56,000 ($55,000 for 2018) or 25% of eligible compensation (20% of self-employed net  earnings).Footnote 2

Who can contribute to the account?

Contributions are made only by you as the employer.

Can I roll over funds from a retirement account with a previous employer?

Yes. You can consolidate your retirement assets by rolling over 401(k), 403(b) and 457 accounts into a Merrill Edge SEP IRA. You can also roll over a SIMPLE IRA after you have participated in the account for 2 years.
A Rollover IRA isn't right for everyone. Consider all of your choices and learn if a rollover may be right for you. For additional information, call 888.637.3343888.637.3343 to speak with a rollover specialist, 24/7.Footnote 

How much does it cost for me and my employees to set up SEP IRA accounts?

There are no setup or administrative fees for your business or your employees, if you have them.

Can funds be withdrawn from a SEP IRA before age 59½?

If the original contribution or earnings are withdrawn before reaching age 59½, there may be an additional 10% early withdrawal penalty.Footnote 3

When are contributions fully vested?

Contributions are 100% vested immediately.

What investment choices are available?

A full range of investment choices is available, including stocks, bonds, options, ETFs and well-known mutual funds. You may also consider a savings IRA from Bank of America, N.A. Learn more about investment choices

What if I prefer to invest with an advisor?

Managed portfolios and one-on-one advice are not available for the Merrill Edge SEP IRA. However, you and your employees will have access to a full range of investments, step-by-step guidance, easy-to-use tools and award-winning research.Footnote 4 Get help when you want it by meeting with a Financial Solutions Advisor in person or on the phone. Learn more about online investing & trading

What are the advantages for employees?

Interest, dividends, employer contributions and other investment earnings have the potential to grow tax deferred until they are withdrawn at retirement. Plus, SEP IRA balances can count toward the account holder's Preferred Rewards status.

What is the plan establishment deadline?

You can establish a SEP IRA and make contributions by your business tax filing deadline, including extensions, to take advantage of the potential tax opportunities for the preceding calendar year.

Is IRS Reporting required?

No. IRS reporting is not required.

Compare small business retirement plans

Need help or have questions?

Call 855.667.9451855.667.9451
Mon-Fri 9 a.m. - 8 p.m. ET to speak with a Financial Solutions Advisor
Footnote  You have choices about what to do with your employer-sponsored retirement plan accounts. Depending on your financial circumstances, needs and goals, you may choose to roll over to an IRA or convert to a Roth IRA, roll over an employer-sponsored plan from your old job to your new employer, take a distribution, or leave the account where it is. Each choice may offer different investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment, and different types of protection from creditors and legal judgments. These are complex choices and should be considered with care. Visit www.merrilledge.com/retirement/rollover-ira or call a Merrill Edge rollover specialist at 888.637.3343888.637.3343 for more information about your choices.

Important disclosures

Footnote 1 As the business owner, your contributions to your SEP IRA account and deductions for such contributions may vary based on your net earnings and self-employment tax deduction. Please consult your tax advisor.
Footnote 2 Contribution and compensation limits are subject to a cost-of-living adjustment annually pursuant to the Internal Revenue Code. Contribution and compensation limits for subsequent years may vary.
Footnote 3 Withdrawals are subject to ordinary income tax. In addition, a 10% additional early withdrawal penalty may apply to withdrawals taken prior to age 59½.
Footnote 
Institutional Investor magazine announced BofA Merrill Lynch Global Research as one of the top global research firms from 2011-2018 based on surveys held throughout the year. The magazine creates rankings of the top research analysts in a wide variety of specializations, drawn from the choices of portfolio managers and other investment professionals at more than 1,000 firms. BofA Merrill Lynch Global Research is research produced by BofA Securities, Inc ("BofAS") and/or one or more of its affiliates. BofAS is a registered broker-dealer, Member SIPC popup, and wholly owned subsidiary of Bank of America Corporation. For more information about this award, go to Institutional Investor popup. Rankings and recognition from Institutional Investor are no guarantee of future investment success and do not ensure that a current or prospective client will experience a higher level of performance results and such rankings should not be construed as an endorsement.
You are eligible to enroll in the Preferred Rewards program if you have an active, eligible Bank of America® personal checking or Bank of America Advantage Banking account and maintain a three-month average combined balance in your qualifying Bank of America deposit accounts and/or your qualifying Merrill investment accounts of at least $20,000 for the Gold tier, $50,000 for the Platinum tier, or $100,000 for the Platinum Honors tier. The combined balance is calculated based on your average daily balance for a three calendar month period. Certain benefits are also available without enrolling in Preferred Rewards if you satisfy balance and other requirements. For details on employee qualification requirements, please call Employee Financial Services or visit the Bank of America intranet site. Merrill Lynch Wealth Management clients with greater than $250,000 in assets with Bank of America and Merrill are eligible for additional banking benefits. Please speak with your Merrill financial advisor for details.
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Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Merrill Edge is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.

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Need some answers about your SEP IRA? See some common questions about SEP IRA plans and get the answers here. SEP IRA rules, SEP IRA contribution limits