Simplified Employee Pension Plan (SEP)

SEPs are ideal for self-employed people and small-business owners who wish to make tax-deductible contributions of up to 25% of their income, while maintaining complete contribution flexibility each year. In general, your client must contribute the same percentage of pay for his/herself and any eligible employees through their IRAs. SEPs are the easiest retirement plans to administer and are a good choice for firms with few or no employees, including individuals who do either full-time or part-time freelance work.

SIMPLE IRA

Firms with 100 or fewer employees can establish a SIMPLE IRA – an employee savings program that in some ways resembles a 401(k). Employees can make pretax contributions through payroll deduction. Employers pay no administration costs and direct all contributions to individual SIMPLE IRAs. Since employer contributions are required each year, this plan makes sense for businesses with predictable income.