Welcome to our lesson on Simplified Employee Pension (SEP) plans. These retirement plans are specifically designed for small business owners and self-employed individuals. The main advantage of SEPs is that contributions are tax-deductible and earnings are tax-deferred. This means that you can save money on taxes while building your retirement fund. As a qualified individual, you can contribute a fixed percentage of your earned net income, with a maximum of $49,000 in 2011. SEPs are known for their flexibility, ease of setup, and simple administration compared to other qualified plans.
