Is a SEP IRA Right for Me?

Retirement Savings without Traditional IRA Restrictions

September 2012

Saving for your future isn't optional. But when it comes to how you save, there are plenty of options on the table. While most people include an individual retirement account (IRA) among their retirement savings tools, not all IRAs are created equal. One valuable IRA option for small businesses, as well as self-employed individuals, is the SEP (Simplified Employee Pension) IRA.

What is a SEP IRA?
A SEP IRA is an individual retirement plan that allows employers to make tax-deductible contributions on behalf of employees — including self-employed individuals. For example, you could serve as both the employer and the only employee in a sole proprietorship. In this case, you'd be able to make tax-deductible contributions into your own retirement account, without having to meet certain eligibility requirements of traditional IRAs. The employer receives a tax deduction for plan contributions, which are made to each eligible employee's SEP IRA on a discretionary basis.

What are the benefits?
Like traditional IRA funds, money in a SEP IRA can grow, tax-deferred, until retirement. During retirement, when money is withdrawn, it is taxed at the same rate as ordinary income. With no minimum annual contribution, businesses can forgo making contributions in leaner years. A SEP IRA can provide the flexibility small businesses and sole proprietorships need to provide for their employees' retirement.

Where do I begin?
When opening a SEP IRA, consider what Ally Bank has to offer. With IRA High Yield 12-Month CDs, Raise Your Rate 2- and 4-year CDs and an Online Savings account, you can start a SEP IRA and take advantage of our competitive rates to help maximize your savings growth. In fact, our CD rates are consistently among the most competitive in the country. Without the overhead of brick-and-mortar banks, Ally Bank can pass the savings on to customers in the form of great rates. Moreover, our IRA Raise Your Rate CDs give you the option to increase your rate once (for a 2 year CD) or twice (for a 4 year CD) if our rates on these IRA CDs go up any time during your CD's term.

Plus, an Ally Bank SEP IRA compounds interest daily to help your retirement savings grow even faster. Some banks compound monthly, quarterly or even annually. We also provide live 24/7 customer service, so there's always someone available to speak to if you need help with any transaction.

Learn more at, or by calling 877-247-ALLY (2559).

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