Self-employed individuals and small business owners have an effective, affordable way to save for retirement for themselves—and for their employees. Our SEP-IRA plan allows you to make deductible contributions of up to $49,000 per participant for tax years 2009 and 2010. You’ll get significant tax-savings potential and T. Rowe Price's low-cost, strong fund performance.
Plan Benefits at a Glance
- Attractive Tax Savings
- Tax-Deferred Growth Potential and Generous Contribution Limits
- Low Costs
- Easy Maintenance, Easy Saving
If you are a business owner, you can reduce your taxable income with each contribution.
- Save over $2,700* in taxes per year while you build your retirement savings.
- Deduct any contributions you make to your account as well as accounts for any employees.
| Without a SEP-IRA Plan | With a SEP-IRA Plan | |
| Net Business Income | $100,000 | $100,000 |
| Less: Net Itemized Deductions, ½ Employment Tax, and Four exemptions | 33,650 | 33,650 |
| Less: Plan Contribution | 0 | 18,587 |
| Taxable Income | 66,350 | 47,763 |
| Regular Tax Due | 9,115 | 6,327 |
| Self-Employment Tax Due | 15,300 | 15,300 |
| Total Tax | 24,415 | 21,627 |
| Tax Savings | $0 | $2,788 |
*Based on 2010 IRS Tax Tables. This chart represents an unincorporated, self-employed, married individual under age 50 with two dependent children, filing jointly. The individual earns $100,000, and the spouse has no earned income. The chart shows the difference between the tax due if no contributions are made and the tax due if the maximum contribution is made to a SEP. Actual savings may vary.
- You can contribute up to $49,000 in 2009 and 2010—much higher than the annual limit for Traditional and Roth IRAs.
- Any earnings on your savings grow tax-deferred until withdrawn.
- Since you may be in a lower tax bracket after you retire, your SEP-IRA withdrawals could be taxed at a lower rate than what you pay now.
- No commissions or plan setup costs.
- Choose from more than 70 no-load mutual funds.
- We keep our mutual fund expenses low to help you save even more.
- An annual $10 administrative fee is charged for each mutual fund account with a balance of less than $5,000. This fee is waived for shareholders with $50,000 or more or households with $100,000 or more in total assets at T. Rowe Price. Assets held in a 529 plan, a plan that is part of the Century Program, or assets held in a plan that was/is recordkept in the Retirement Plan Services division of T. Rowe Price are not counted toward these limits.
- There is a $10 closeout fee applied to an account that is closed at T. Rowe Price. The fee will be deducted automatically from the proceeds of the redemption from each mutual fund unless, at the time of redemption, the annual administrative fee for the year has been paid. The closeout fee applies regardless of the size of the mutual fund investments.
- You make deductible contributions directly to individual retirement accounts (SEP-IRAs) for yourself and your employees.
- No reports to file with the IRS.
- Eligible employees can combine SEP-IRA contributions with other Traditional IRA contributions in the same account.
- Our Small Business Retirment Specialists are available to help you set up your account and answer any questions.
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