Can you have a SEP IRA and a SIMPLE IRA?

As long as you’re not the owner of your employer’s business, you can contribute the maximum to both plans. The contribution limits are separate for both plans.

What is the advantage of a SEP IRA?

SEP IRAs have advantages for both employees and employers. As the employee, your employer makes contributions for you, and those contributions can be as high as $58,000 a year. But as the employer, you’re not obligated to make contributions. That means if you have a tight year, you can pull back on what you contribute. When business picks back up, you can resume normal contributions.

Can employees contribute to their own IRA and a SEP IRA or SIMPLE IRA?

Yes, employees can contribute to both their own retirement plans and an employer-sponsored retirement plan.

Is a SEP IRA a traditional IRA?

SEP IRAs are traditional IRAs with tax-deferred contributions. That means you’re taxed when you withdraw money in retirement. The same goes for SIMPLE IRAs.