Freelancers: Say Hello to Our New SEP IRA

Being on your own, career-wise, has its plusses and minuses.

Plusses? No boss, no cubicles, no problem if you want to work from the beach. Minuses? Well, besides a pretty skimpy public safety net, you have to figure out how to be smart about saving and investing without the help of an HR department or a 401(k).And that's why the feds created the SEP IRA. And it's why we just launched our very own optimized-return, low-fee version of it.

Why is the SEP IRA the best way to save for retirement if you're freelance?

Well a traditional IRA is great — among other virtues, every dollar you contribute lowers your income tax. The problem is you can only contribute $5,500 to it annually. That's way less than a 401(k) — which maxes out at $18,000, plus any contributions your employer makes on your behalf.

The SEP IRA — it stands for Simplified Employee Pension Plan, by the way, not Self-Employed Pension Plan — has the same advantages as a traditional IRA, though the tax deductions are calculated a little differently (if you want to know more about how, click here.) But more importantly, a SEP also allows you to contribute up to 25% of your net income to a maximum of $54,000.

Wealthsimple uses technology and smart, friendly humans to help you grow and manage your money. Invest and save in a better, simpler way

Money Diaries

"I DON’T KNEEL DOWN AT THE ALTAR OF THE ALMIGHTY DOLLAR. THAT’S NOT FOR ME."

Spike Lee Tells Us Why He Never Feels Bad Asking for Money

subscribe

Get the best stories from our magazine every month

Sign up for our email newsletter

  • News

    Don’t Forget: You Only Have One Month to Lower Your 2017 Tax Bill

    The last day to contribute to your IRAs is just a month away (April 17th). It could save you a lot on taxes — and put your money to work making more money.

  • News

    You’ve Trusted Us with $2 Billion. And We’re Growing Faster Than Ever.

    Today we announce that we hit the $2 billion mark in assets, and have secured an additional $65 million investment so we can grow better, faster.

  • Get Started

    Get rich slow

    Powerful financial tools to help you grow and manage your money. Get started now.

    see-more cta
  • News

    We'll Track Your IRA Contributions So You Don't Have To

    You know you should contribute. You know you should max it out. But you can't remember how much room you have left. Don't worry! Now it's all in your dashboard.

  • News

    Our New App: 137% More Fun, Simple and Pretty

    Why is the new version of our app such a big deal? Because we're as much a software company as we are a financial company, and we live for this stuff.

` `

Meet Wealthsimple

Get rich slow

Powerful financial tools to help you grow and manage your money. Get started now.

Learn moreright arrow icon

Our best stories, once a month.

Sign up for our newsletter

The content on this site is produced by Wealthsimple Technologies Inc. and is for informational purposes only. The content is not intended to be investment advice or any other kind of professional advice. Before taking any action based on this content you should consult a professional. We do not endorse any third parties referenced on this site. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only. By using this website, you accept our (Terms of Use) and (Privacy Policy). Copyright 2020 Wealthsimple Technologies Inc.

;