Small Business Owners Benefit from Self-Directed SEP IRAs
A Self-Directed SEP IRA (Simplified Employee Pension) is a powerful retirement savings plan designed for self-employed individuals and small business owners. Unlike traditional SEP IRAs, a self-directed version allows for a wider range of investment options, including real estate, private equity, precious metals, and cryptocurrencies.
What is a SEP IRA?
A SEP IRA (Simplified Employee Pension) is a retirement savings plan designed for self-employed individuals and small business owners, offering a simple and tax-advantaged way to contribute to retirement. Employers can contribute up to 25% of an employee’s compensation, with a maximum annual limit. Contributions are made by the employer only and are tax-deductible, helping reduce taxable income. When self-directing your SEP, you have the ability to invest in a wide range of alternative assets, such as real estate, private equity, cryptos, and more, going beyond traditional asset classes.
SEP IRAs are easy to set up and have low administrative requirements, making them an attractive option for businesses of all sizes. However, employers must contribute the same percentage of compensation for all eligible employees, including themselves.
Why Choose IRA Financial for Your Self-Directed SEP IRA?
By choosing IRA Financial as your SEP IRA custodian, you can tailor your retirement investments to align with your financial goals — improving your portfolio’s growth and stability.
No Hidden Fees
No commissions or surprise charges.
Expert Support
Live chat available 8AM–6PM Central Time.
Flexible Investing
Manage assets or have us handle them.
2,400 Investors
Serving investors in all 50 states.
Industry Expertise
Led by Self-Directed SEP IRA specialists.
Dedicated Focus
100% Self-Directed SEP IRA solutions.
Self-Directed SEP IRA
- Best plan for small business owners
- Invest in almost everything you want
- Checkbook Control – serve as your own trustee
- Maximize tax deductions (up to $70,000)
Checkbook Control
$999
setup fee
$495
annually
Custodian Control
$0
setup fee
$495
annually
How to Open a Self-Directed SEP IRA
A Self-Directed SEP IRA lets you take charge of your retirement investments. Open an account easily and start diversifying on your terms.
The Benefits of a Self-Directed SEP IRA
Better tax advantages
Better tax advantages
Make larger tax-deferred contributions as a business owner, reducing taxable income while growing retirement savings faster—ideal for high-earning solopreneurs or lean teams.
Broader investment choices
Broader investment choices
Use your SEP IRA to invest in alternative assets like real estate, private equity, or crypto—just like traditional IRAs—but with greater contribution limits.
Greater earning potential
Greater earning potential
Take advantage of high annual contribution caps (up to 25% of compensation) to accelerate retirement growth—especially powerful when paired with high-return investments.
Direct investment control
Direct investment control
Choose where and how to invest without brokerage restrictions. With a Self-Directed SEP IRA, you make the calls.
Faster transactions
Faster transactions
Act quickly on opportunities with direct access and minimal red tape—perfect for hands-on investors or entrepreneurs managing their own portfolios.
Custodial support
Custodial support
A dedicated SEP IRA custodian handles the backend—you stay focused on growth, while they handle compliance and recordkeeping.
Built-in asset protection
Built-in asset protection
Safeguard retirement assets with federal protections and smart structuring options designed for business owners managing higher-value investments.
| SEP IRA | SIMPLE IRA | Solo 401(k) | |
|---|---|---|---|
| Tax Advantages | Contributions are tax-deductible for the employer, and grow tax-deferred (tax-free if Roth) until withdrawal | Contributions are tax-deductible, and funds grow tax-deferred (tax-free if Roth) until withdrawal | Contributions are tax-deductible, and funds grow tax-deferred (tax-free if Roth) until withdrawal |
Eligibility | Available to any employer including self-employed individuals | Available to businesses with 100 or fewer employees who earned at least $5,000 in the previous year | Only available to owner-only businesses with no full-time employees (other than a spouse or other owners) |
Contribution Limits | Employer contributions up to 25% of compensation or $70,000, whichever is less | Up to $16,500 | Up to $70,000 |
Catch-up Contributions | None | $3,500 if you are at least age 50 or $5,250 between the ages of 60-63 | $7,500 if you are at least age 50 or $11,250 between the ages of 60-63 |
Contribution Rules | Employers must contribute the same percentage of compensation for all eligible employees | Employers are required to match employee contributions dollar-for-dollar up to 3% | Employees can contribute up to the annual limit. Employers can contribute a percentage of self-employment income. |
Withdrawal Penalties | Withdrawals before 59½ are taxed as income and incur a 10% penalty | Withdrawals before 59½ incur a 10% penalty, and withdrawals within the first 2 years incur a 25% penalty | Withdrawals before 59½ are taxed as income and incur a 10% penalty |
Rollover Options | Can be rolled over into another SEP IRA, Traditional IRA, or Roth IRA | Can be rolled over into another SIMPLE IRA, Traditional IRA, or Roth IRA after a 2-year waiting period | Solo 401(k) plans can be rolled over into an IRA, or into another 401(k) plan |
Roth Option | Yes | Yes | Yes |
Book a Consultation
Schedule a free consultation with a member of our team to explore how opening a self-directed retirement account can unlock your ability to invest tax-free in a variety of alternative assets.
See What Our Clients Have to Say
What Alternative Assets Can You Invest in with a SEP IRA?
At IRA Financial, you can diversify your portfolio by investing in a wide range of alternative assets beyond traditional stocks and bonds. These include:
Real Estate
Residential, commercial, raw land, and rental properties.
Cryptocurrency
Bitcoin, Ethereum, and other digital assets.
Precious Metals
Gold, silver, and other IRS-approved metals.
Tax Liens & Deeds
Acquire property liens for potential returns.
Private Equity
Invest in startups, private companies, and venture capital.
Private Placements
Invest in a non-public company through the sale of securities.
Self-Directed SEP IRA FAQs
Answers to some of the most commonly asked questions about Self-Directed SEP IRAs. You can check out our full list of FAQs here.
Who is a Self-Directed SEP IRA designed for?
A Self-Directed SEP IRA is designed for:
- Businesses with employees (if contributions are provided equally for all eligible employees)
- Self-employed individuals (freelancers, consultants, gig workers)
- Small business owners (LLCs, sole proprietors, partnerships, S corporations)
What employees are eligible for a SEP IRA?
Eligible employees include:
- Must be at least 21 years old
- Worked for the employer for at least three of the past five years
- Earned at least $750 in compensation in 2025
Note: Employers must contribute the same percentage of salary for all eligible employees.
Can I contribute to both a SEP IRA and a Traditional IRA?
Yes, you can contribute to both, but total contributions must not exceed the IRS limits.
What are the contribution limits for a SEP IRA?
Contributions must be made by the employer and can vary each year between 0% and 25% of compensation with a maximum of $70,000 for 2025, which is $1,000 more than 2024. Each eligible employee must receive the same percentage.
What happens if I withdraw funds early?
Withdrawals before age 59½ are subject to a 10% penalty, plus income tax.
Can I roll over an existing IRA into a Self-Directed SEP IRA?
Yes, you can roll over funds from another IRA or 401(k) into a Self-Directed SEP IRA, which is especially useful if you wish to make alternative investments.
Are there required minimum distributions (RMDs)?
Yes, RMDs begin at age 73 with a traditional, pretax, SEP IRA.
Can you make Roth contributions to a SEP IRA?
Yes. Beginning in 2023, thanks to the SECURE Act 2.0, you may now elect to make after-tax Roth contributions to a SEP IRA. There is no immediate tax break, however, qualified distributions are tax free.
Can employees opt out of a SEP IRA?
Yes, employees are not required to participate, but if the employer contributes, all eligible employees must receive contributions.
How do I avoid IRS penalties?
- Follow IRS rules on prohibited transactions.
- Ensure contributions don’t exceed limits.
- Withdraw funds only after age 59½ (or face penalties).
Ready to plan for your future?
Take control of your retirement by investing in alternative assets like real estate, cryptocurrency, businesses, and more. Start creating wealth today by opening an account.
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