A SEP-IRA is one of the easiest small business retirement plans to set up and maintain. You can make sizable contributions for yourself and any eligible employees. There’s little administration, and tax filing isn’t required. And you can vary contributions from year to year—or even skip a year.
What are the fees and commissions?
- Monthly service fees: $0
- Account minimum: $0
- Commissions: $8.95 per online trade;1 $0 per Schwab ETF online trade in your Schwab account2
There are no fees to open or maintain your account. Other fees may apply; please see Account Pricing.
What do I get with this SEP-IRA?
Every Schwab account comes with one-on-one investment help and guidance. With this account, you’ll also get:
- Tax-deductible contributions that vest immediately
- Tax-deferred earnings
- Flexible annual contributions
- High contributions for you
- A way to contribute to qualified employees’ accounts
- Retirement planning tools and resources in our
- 24/7 service and support
Account fees and commissions
There is no fee to open or maintain an account at Schwab. Our SEP-IRA offers:
- Minimum opening deposit: $0
- Monthly service charge: $0 (other fees apply)
- Trade commissions: $8.95 per online trade;1 $0 per Schwab ETF online trade in your Schwab account2
Want complete pricing details?
Find out more about our fees and minimums.
Quick answers to related questions
Have questions about our SEP-IRA? Here are responses to some of the most common questions we hear. If you have a specific question that’s not answered here, please call us at 800-435-4000.
To get detailed instructions see Establish Your Plan, or call us at 800-435-4000 if you have questions.
A Simplified Employee Pension Plan (SEP-IRA) is specifically designed for self-employed individuals and small business owners who want to save for retirement without getting involved in complex plan administration. If you are self-employed or have few employees, and if you want flexibility in the amount you contribute annually—particularly if you want to make high contributions—a SEP-IRA might be right for you.
Almost any type of business is eligible to establish a SEP-IRA, from self-employed individuals to multi-person corporations (including sole proprietors, partnerships, S and C corporations, and limited liability companies [LLCs]), tax-exempt organizations, and government agencies.
Employer contributions are tax-deductible. Earnings grow tax-deferred and are not taxed until they are withdrawn.
A SEP-IRA is funded with employer contributions only. It does not need to be funded annually, but if you have employees and contribute for yourself, you must contribute for all eligible employees, including those who have terminated employment during the year. Full vesting is immediate.
You may contribute up to 25% of compensation (20% if you’re self-employed3) or $50,000 for 2012 and $51,000 for 2013, whichever is less.
Plans must be established by the tax-filing deadline of the business (generally April 15, plus extensions) in order to contribute for that tax year. This is also the deadline for annual contributions.
SEP-IRAs are easy to set up and maintain, and no tax filing is required. Schwab reports all contributions and end-of-year fair market value on Form 5498 by May 31 each year.
You can start making penalty-free withdrawals from your account after age 59½. If you do not start Required Minimum Distribution (RMD) withdrawals by age 70½, or take less than the required amount, you will face a 50% penalty on the total amount of the distribution.
There are certain exceptions for which you can withdraw funds before age 59½ without taking a 10% penalty, including a rollover to another IRA, some higher education expenses, qualified first-time home purchase expenses, death, disability, and certain medical expenses.
Start here to establish your plan.
Follow these instructions for establishing and contributing to a SEP-IRA plan. Need help? Call us at 800-435-4000.
| 1. Review the basic plan document, which describes and governs your account, and keep it for your records. |
Basic Plan Document |
| 2. Print and complete the adoption agreement. Retain a copy and return the signed original to Schwab. |
Adoption Agreement |
| 3. Print and complete your account application. Retain a copy and return the signed original to Schwab. |
Account Application |
| 4. Print and complete your employer’s agreement. Retain a copy and return the signed original to Schwab. |
Employer’s Agreement |
| 5. Read answers to frequently asked questions about the Schwab SEP-IRA. |
Employer Q&A |
| 6. Optional: Review the benefits, features, and contribution eligibility of the plan. |
Information Sheet |
What comes next?
After you’ve done your initial paperwork, here are the next steps.
Download, print, and distribute the following documents to each eligible employee.
*Note: Before you distribute the Employee Summary, complete the summary in accordance with the elections you made on the Schwab SEP-IRA Adoption Agreement.
Once you have established your Schwab SEP-IRA plan, opened your own SEP-IRA, and opened SEP-IRAs for eligible employees (as applicable), you may begin making contributions.
- Online: If you do not have employees, you can contribute to your account online by transferring funds from your Schwab brokerage account into your SEP-IRA (login required). Contributions for employees cannot be made online.
- By mail: Send one check payable to Charles Schwab & Co., Inc., FBO “Your Company Name” along with a letter listing:
- Each participant’s account number (including your own)
- The exact amount to be deposited per account
- The plan year for which you are contributing
Be sure your check total matches the total amount of participant contributions. Mail your check and the letter to the nearest Schwab operations center listed below:
Charles Schwab & Co., Inc.
P.O. Box 628291
Orlando, FL 32862-8291 |
Charles Schwab & Co., Inc.
P.O. Box 52114
Phoenix, AZ 85072-2114 |
Take the next step.
Open a Schwab SEP-IRA today.
Get detailed instructions above in Establish Your Plan.
Or call 800-435-4000.
1. Restrictions apply: The $8.95 commission does not apply to foreign stock transactions, large block trading transactions requiring special handling, or restricted stock transactions. All broker-assisted and automated phone trades are subject to service charges. See the Charles Schwab Pricing Guide for details. Employee equity compensation transactions are subject to separate commission schedules.
2. Restrictions apply: Online trades of Schwab ETFs™ are commission-free at Charles Schwab & Co., Inc. (member SIPC), while trades of third-party ETFs are subject to commissions. Broker-assisted and automated phone trades are subject to service charges. A minimum deposit of $1,000 is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for details. All ETFs are subject to management fees and expenses.
3. This percentage of business net profit, after subtracting the self-employment tax deduction, is equivalent to the employee percentage given.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can obtain a prospectus by visiting www.schwabetfs.com. Please read the prospectus carefully before investing.
Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares or ETFs are not individually redeemable directly with the ETF.
This information is not intended to be substituted for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, Financial Planner or Investment Manager.
Account must be approved and funded before trading can occur.
Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO is not affiliated with Charles Schwab & Co., Inc.
